Monday, March 27, 2017

WEAK WEEK

Another weak of falling from the record close of 21,000 DJIA (30); breadth also fell - Adv/Decl and New hi's. Rising Indicators included CBOE put/call ratio, Inv.Intell. Bulls and MMF flows (into money markets bigtime).
Danger signals are margin interest and the above I.I. Bulls to Bears. Inflation via TIPS seem to be picking up as well.
Here are last week's ##s:

Date   3/24/2017 3/17/2017
Indices: DJIA  20596 20914
  NAZ  5828 5901
SPX  2343 2378
WklyVolume (Bshs). naz/ny…. 9.2/4.3 10.0/5.5
Specul.Ratio hi=bullish 2.14 1.82
Sentiment: put/call-CBOE  71 66
VIX>50-alltmlow=8.8 13 11.3
DeltaMSI-50% MAC crossover 53 53
Advance/Dec-NYSE.. 1186/1923 2243/868
Weekly Net: -737 1375
     Cumulative: 173883 174620
Weekly  NYSE hi/low… 218/115 305/139
New Hi's/Low's Nasdaq h/l 300/172 372/160
McClellan  Oscillator -9 2
McClellanSum .+750/-1000 222 320
Newsletter Inv.Intel -Bull 56.7 53.4
Surveys-Tues Bear:-5yrs 17.3 17.5
Wed. AAII  -Bull  35.3 31.2
Bear  30.5 38.7
US$-WSJ 99.8 100.3
3-box rev Bullish%-  75 76
US equity -ICI Fund Flows WeekLate 9.0B
MMF flows Change in $B (23.3B) (11.7B)
MargDebt- top (300M) monthly  513Bnh Jan.
10-yr Tsy yield hi= stock buying 2.4 2.5
2-yr Tsy Yield: Inflation 1.25 1.33
TIP (ETF) Inflation 114.4 113.7

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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Monday, March 20, 2017

Wearin' Of The Green

Stocks were basically green (UP), at least for the start of last week, only to sustain a slight hangover into the weekend.  Breadth did a major turnaround, from negative to positive; the McClellan Oscillator jumped from minus 61 to plus two. Still worrisome are the Bulls to Bears ( Inv. Intell.) and record margin interest, which could cost more as rates rise. Contrary to conventional wisdom, stocks to not fall as interest rates rise, at least at first - when they normalize, bond rates become competitive, especially when they overshoot, as they are wont to do.
Here are the numbers:

Date 3/17/2017 3/10/2017
Indices: DJIA  20914 20902
NAZ  5901 5861
SPX  2378 2372
WklyVolume (Bshs). naz/ny…. 10.0/5.5 9.2/4.2
Specul.Ratio hi=bullish 1.82 2.19
Sentiment: put/call-CBOE  66 62
VIX>50-alltmlow=8.8 11.3 11.7
DeltaMSI-50% MAC crossover 53 58.5
Advance/Dec-NYSE.. 2243/868 678/2426
Weekly Net: 1375 -1748
     Cumulative: 174620 173245
Weekly  NYSE hi/low… 305/139 162/169
New Hi's/Low's Nasdaq h/l 372/160 236/166
McClellan  Oscillator 2 -61
McClellanSum .+750/-1000 320 440
Newsletter Inv.Intel -Bull 53.4 57.7
Surveys-Tues Bear:-5yrs 17.5 17.3
Wed. AAII  -Bull  31.2 30
Bear  38.7 46.5
US$-WSJ 100.3 101.4
3-box rev Bullish%-  76 76
US equity -ICI Fund Flows WeekLate 4.3B
MMF flows Change in $B (11.7B) 10.1B
MargDebt- top (300M) monthly  Jan. 513Bnh
10-yr Tsy yield hi= stock buying 2.5 2.6
2-yr Tsy Yield: Inflation 1.33 1.35
TIP (ETF) Inflation 113.7 113

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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Monday, March 13, 2017

CON-GRESS or PRO-GRESS?

In these divisive times, not only is the country divided as to opinions, but so is Congress. Winston Churchill once said Democracy is the worst form of government - except for all the others.
Looking up the word "Congress", it comes from the Latin congressus, or congredi, with meanings including coming together and coitus (OMG).

Previous columns have mentioned Hegel's use of Dialectic - where Thesis meets Antithesis to form Synthesis, taking the best ideas from both. Perhaps we should rename Congress: COMITY.

Last week saw the stock market pause on its 8th year ann'y after  the Huge Trump rally. Most Indicators stayed the same direction, only worse. Breadth was bad, as Advances fell behind Declines and New Lows rose on the NYSE and Nas. My fave Indicator failed - the McClellan Oscillator falling below -50 (usually a BUY signal on Monday.

Danger signals remain: Large (record) Margin Interest, I.I. Bulls 3:1 over Bears, and Insider Selling is getting attention. A rare INFLOW to MMFs, most since last Dec. Safe money looks to the 2-year Treas, now 1.37%!
Here are the numbers:
Date 3/10/2017 3/3/2017
Indices: DJIA  20902 21005
NAZ  5861 5870
SPX  2372 2383
WklyVolume (Bshs). naz/ny…. 9.2/4.2 10.2/4.8
Specul.Ratio hi=bullish 2.19 2.13
Sentiment: put/call-CBOE  62 61
VIX>50-alltmlow=8.8 11.7 10.9
DeltaMSI-50% MAC crossover 58.5 66.7
Advance/Dec-NYSE.. 678/2426 1438/1652
Weekly Net: -1748 -214
     Cumulative: 173245 174993
Weekly  NYSE hi/low… 162/169 474/75
New Hi's/Low's Nasdaq h/l 236/166 490/132
McClellan  Oscillator -61 -22
McClellanSum .+750/-1000 440 768
Newsletter Inv.Intel -Bull 57.7 4:1.63.1
Surveys-Tues Bear:-5yrs 17.3 16.5
Wed. AAII  -Bull  30 37.9
Bear  46.5 35.4
US$-WSJ 101.4 101.3
3-box rev Bullish%-  76              79nh
US equity -ICI Fund Flows WeekLate 5.8B
MMF flows Change in $B 10.1B (2B)
MargDebt- top (300M) monthly  513Bnh
10-yr Tsy yield hi= stock buying 2.6 2.5
2-yr Tsy Yield: Inflation 1.35 1.3
TIP (ETF) Inflation 113 114.1

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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Monday, March 6, 2017

Oh, SNAP

In my day we used a different S*** word; investors in Snapchat may switch to the new one, if Barron's is correct and the stock gets cut in half. Looking at today's market - all my positions are in a Sea of Red (after a nice runup). Hopefully it is just Pause that Refreshes!
Barron's also notes that it is the Individual that is driving the market now (not a good sign), rather than Institutions. Bulls at II (Investors' Intelligence) have risen to a 4 to 1 ratio over Bears (see below), not seen since 1987- a year that will go down.....
 Prominent in last week's Sentiment/Breadth data was the rise (monthly) in Margin Interest to new highs, at 513B. As reported earlier, if/when a crash comes, higher rates will cost more to borrow as panickers and AI machines could cause a cascade of Selling, like 1987..
That said, Breadth and momentum still seems strong on Trump's promises.
Here are the numbers:

Date   3/3/2017 2/24/2017
Indices: DJIA  21005 20821
  NAZ  5870 5845
SPX  2383 2367
WklyVolume (Bshs). naz/ny…. 10.2/4.8 7.3/3.6
Specul.Ratio hi=bullish 2.13 2.03
Sentiment: put/call-CBOE  61 64
VIX>50-alltmlow=8.8 10.9 11.5
DeltaMSI-50% MAC crossover 66.7 71.9
Advance/Dec-NYSE.. 1438/1652 1763/1334
Weekly Net: -214 429
     Cumulative: 174993 175207
Weekly  NYSE hi/low… 474/75 449/41
New Hi's/Low's Nasdaq h/l 490/132 496/95
McClellan  Oscillator -22 2
McClellanSum .+750/-1000 768 812
Newsletter Inv.Intel -Bull 4:1.63.1 61.2
Surveys-Tues Bear:-5yrs 16.5 17.5
Wed. AAII  -Bull  37.9 38.5
Bear  35.4 32.1
US$-WSJ 101.3 101.1
3-box rev Bullish%-  79nh 77nh
US equity -ICI Fund Flows WeekLate 3.4B
MMF flows Change in $B (2B) 5.1B
MargDebt- top (300M) monthly  513Bnh 490B
10-yr Tsy yield hi= stock buying 2.5 2.3
2-yr Tsy Yield: Inflation 1.3 1.15
TIP (ETF) Inflation 114.1 114.9

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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Monday, February 27, 2017

TAKE A HIKE

Since everything Trump is beeyoutiful these days, a possible rate hike by the Fed maybe in the cards for mid-March - a good time to jump into Treasuries at auction (par) if you have some spare cash.
Stocks, however, could be heading for at least a Correction, with consecutive record highs rivaling 1987 !!!!!
Sentiment and Breadth seem equal to the rising market in intensity; Equity flows - funds and ETFs (those traded on exchanges) have been positive since the election (after a brief respite) . They were mostly flowing Out all of 2016 until then.  Margin Debt is spectacularly high -  a danger if stocks start to slide and people/robos have to sell to meet margin calls -Hello!
All else seems stable - Bulls, advance/declines, VIX, but Inflation -as measured by TIPS hit a new high last week. See below:

Date   2/24/2017 2/17/2017
Indices: DJIA  20821 20624
  NAZ  5845 5838
SPX  2367 2351
WklyVolume (Bshs). naz/ny…. 7.3/3.6 9.6/4.3
Specul.Ratio hi=bullish 2.03 2.23
Sentiment: put/call-CBOE  64 57
VIX>50-alltmlow=8.8 11.5 11.5
DeltaMSI-50% MAC crossover 71.9 72.6
Advance/Dec-NYSE.. 1763/1334 1606/1501
Weekly Net: 429 105
     Cumulative: 175207 174776
Weekly  NYSE hi/low… 449/41 504/33
New Hi's/Low's Nasdaq h/l 496/95 555/85
McClellan  Oscillator 2 2
McClellanSum .+750/-1000 812 778
Newsletter Inv.Intel -Bull 61.2 61.8
Surveys-Tues Bear:-5yrs 17.5 17.6
Wed. AAII  -Bull  38.5 33.1
Bear  32.1 32.4
US$-WSJ 101.1 100.9
3-box rev Bullish%-  77nh 76
US equity -ICI Fund Flows WeekLate 8.1B
MMF flows Change in $B 5.1B (2.0B)
MargDebt- top (300M) monthly  490B
10-yr Tsy yield hi= stock buying 2.3 2.4
2-yr Tsy Yield: Inflation 1.15 1.2
TIP (ETF) Inflation 114.9 114.2

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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Monday, February 20, 2017

JANET YODA

What comes first - the departure of the current Fed Head or the inevitable Recession, which could be a doozy? For over  a Century, we've had an "R" around the zero year of the decennial cycle, plus or minus a year or so - last one was 2008, after which the Fed dropped interest rates to...Zero and propped up the markets - stock and real estate.
Worries coming up this year (contrary to Janet's hemming and hawing, which talking heads posit that move computer-driven markets) are: NAFTA LA VISTA (coined by Dimitra D. in Barron's this week) , the Border Tax, CalExit, the North Korea "nucular" threat.
Stocks crawled up higher to new records and the VIX (Volatility) stayed low - which unlike high IV could stay that way for a long while ( more from Bill Luby's option column in Barron's). Threats to the market are: Extreme Margin Interest, length of the Bull market, $20T national debt, and some tech valuations.
What could possibly go Rong?
Here are the numbers:
Date 2/17/2017 2/10/2017
Indices: DJIA  20624 20269
NAZ  5838 5734
SPX  2351 2316
WklyVolume (Bshs). naz/ny…. 9.6/4.3 9.3/4.1
Specul.Ratio hi=bullish 2.23 2.27
Sentiment: put/call-CBOE  57 67
VIX>50-alltmlow=8.8 11.5 10.9
DeltaMSI-50% MAC crossover 72.6 68.5
Advance/Dec-NYSE.. 1606/1501 1974/1115
Weekly Net: 105 859
     Cumulative: 174776 174671
Weekly  NYSE hi/low… 504/33 379/44
New Hi's/Low's Nasdaq h/l 555/85 423/110
McClellan  Oscillator 2 27
McClellanSum .+750/-1000 778 686
Newsletter Inv.Intel -Bull 61.8 62.7
Surveys-Tues Bear:-5yrs 17.6 16.7
Wed. AAII  -Bull  33.1 35.8
Bear  32.4 27.7
US$-WSJ 100.9 100.7
3-box rev Bullish%-  76 71
US equity -ICI Fund Flows WeekLate .8B
MMF flows Change in $B (2.0B) (3.2B)
MargDebt- top (300M) monthly 
10-yr Tsy yield hi= stock buying 2.4 2.4
2-yr Tsy Yield: Inflation 1.2 1.2
TIP (ETF) Inflation 114.2 114.2


With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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Monday, February 13, 2017

DIALECTICS

One of the most profound and useful concepts I've found, which apply to so many things - such as today's political, racial, Congressional, and nationalistic divides- is Dialectic: put forth recently by Hegel, and Chalybaus, -that  Thesis, when countered by Antithesis, should result in a better Synthesis. Taking the better parts of both sides and merging them into a better way!

So far... the new environment has been beneficial for the stock market--until it's Not. Stocks are pushing up against high valuations, number of years (both bond and stocks), debt and market % of GDP, etc.  Even margin debt at low rates is dangerous.

But Sentiment and breadth show no sign of weakness yet. $$ flows out of MMFs into stock MUFs and ETFs; Inflation contained and Volatility low. Here are the numbers:

Date   2/10/2017 2/3/2017
Indices: DJIA  20269 20071
  NAZ  5734 5666
SPX  2316 2297
WklyVolume (Bshs). naz/ny…. 9.3/4.1 9.8/4.6
Specul.Ratio hi=bullish 2.27 2.13
Sentiment: put/call-CBOE  67 71
VIX>50-alltmlow=8.8 10.9 11
DeltaMSI-50% MAC crossover 68.5 71.3
Advance/Dec-NYSE.. 1974/1115 1914/1184
Weekly Net: 859 730
     Cumulative: 174671 173812
Weekly  NYSE hi/low… 379/44 331/57
New Hi's/Low's Nasdaq h/l 423/110 350/125
McClellan  Oscillator 27 18
McClellanSum .+750/-1000 686 654
Newsletter Inv.Intel -Bull 62.7 61.8
Surveys-Tues Bear:-5yrs 16.7 17.6
Wed. AAII  -Bull  35.8 32.8
Bear  27.7 34.2
US$-WSJ 100.7 99.7
3-box rev Bullish%-  71 71
US equity -ICI Fund Flows WeekLate 11.8B
MMF flows Change in $B (3.2B) (5.7B)
MargDebt- top (300M) monthly  490B
10-yr Tsy yield hi= stock buying 2.4 2.5
2-yr Tsy Yield: Inflation 1.2 1.2
TIP (ETF) Inflation 114.2 113.9

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance


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