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Monday, April 20, 2015

FED UP

Perhaps the cause of this new found Volatility in the markets in 2015 is that the Fed finally stopped driving them UP, forcing prudent investors into riskier assets. Even at triple the 2009 index levels, 300 points down, then up, seems pretty material. Maybe the Fed finally decided that, although the first ZIRP (Zero Interest Rate Policy) was needed, the multi-year extension was not effective. To diet is good, but to starve one's self to death is counter-productive!

After two market crashes since 2000, people want to avoid stocks and increase savings due to lower rates; if people are $aving, they are not $pending, ergo corporations are not expanding! Thus a sluggish Economy!

Last weeks flip-flops in Sentiment included the NYSE Advance/Decline - +900 to -600; therefore the McClellan Oscillator went from +20 to -20 as well, although the NYSE New Highs to Lows were almost 10:1 (see below). Commercial shorts in Gold expanded again, so no rise in sight; this week I also added COT OIL traders, with a heavily short position, and the US $, in a Wall St journal Index (not the basket one usually sees, which topped out recently. Finally, MMF (money market) flows were hugely negative. $$ flowing into ETFs outnumber managed mutual funds 15 to 1!

Here are the numbers:


Date> 4/17/2015 4/10/2015
Indices: DJIA  17826 18057
  NAZ  4931 4995
SPX  2081 2102
WklyVolume (Bshs). naz/ny…. 8.5/3.9 8.1/3.7
Specul.Ratio hi=bullish 2.18 2.19
Sentiment: put/call-CBOE  65 56
VIX>50-alltmlow=8.8 13.9 12.9
Advance/Dec-NYSE.. 1285/1942 2072/1155
Weekly Net: -657 917
     Cumulative: 167042 167699
Weekly  NYSE hi/low… 258/34
New Hi's/Low's Nasdaq h/l 294/102
McClellan  Oscillator -20 23
McClellanSum .+750/-1000 536 495
Newsletter Inv.Intel -Bull 50.5 50.4
Surveys-Tues Bear:-5yrs 13.9 14.2
Wed. AAII  -Bull  32.1 28.7
Bear  22.8 24.2
COT:SPX w/w large/small (net)k 10k/(8k) 10k/(9k)
COT:gold  comm.hedg long-short.000 (104k) (108k)
COT:OIL comm.hedg long-short. -280
US$-WSJ 86.8
CEOinsider selling 16:1 22:1
off.&bd b/s.vs. 10% holder b/s .150:20 .160:30
3-box rev Bullish%-  74 71
US equity -ICI Fund Flows WeekDelay (1.3B)
MMF flows Change in $B (39B) 0
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.51% 0.56%
TIP (ETF) Inflation 115.49 113.95


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, April 13, 2015

APRIL: Shower me the Money

No guarantees of future results of course, but it was reported that the 10 days following Income Tax Day has been positive for the stock market -so I checked. Going back to 2005 this is true, if only a few S&P points some years. Whether it is because of refunds, previously mentioned stock Buybacks as earnings season starts, one can only guess. Barron's also speaks of ETFs having to buy stocks- also a positive factor.

On the downside, every Rainbow must have Rain to produce it! Viewing the PBS program of the 1929 Crash, there are some similarities: It ran up 8 years after WWI (we are up 6 so far, tripling the March '09 low); Blind pools manipulated markets (HFTs?); the Economy slowed, but stocks rose.
Margin buying was at record levels.

Luckily there were warning signs - Corrections- which should be paid to attention to; either hedging or exiting.

The big difference between then and now, however, is the Sentiment. Everyone was in the markets then - shoeshine boys, cab drivers, etc. Last week, again, my Indicators only showed tepid levels:
With all markets barely below record levels, Volume last  week was average, as was the ratio of Nasdaq Volume to NYSE (speculative); option put to call ratio and the VIX were quiet; but Gold shorting by the Commercial traders (hedgers) went back up - not a good sign.

Here are the numbers:

Date> 4/10/2015 **4/2/2015
Indices: DJIA  18057 17763
  NAZ  4995 4886
SPX  2102 2066
WklyVolume (Bshs). naz/ny…. 8.1/3.7 **6.9/3.2
Specul.Ratio hi=bullish 2.19 2.16
Sentiment: put/call-CBOE  56 69
VIX>50-alltmlow=8.8 12.9 14.7
Advance/Dec-NYSE.. 2072/1155 2145/1070
Weekly Net: 917 1075
     Cumulative: 167699 166782
Weekly  NYSE hi/low… 261/57
New Hi's/Low's Nasdaq h/l 237/125
McClellan  Oscillator 23 12
McClellanSum .+750/-1000 495 380
Newsletter Inv.Intel -Bull 50.4 54.5
Surveys-Tues Bear:-5yrs 14.2 14.2
Wed. AAII  -Bull  28.7 35.4
Bear  24.2 32
COT:SPX w/w large/small (net)k 10k/(9k) 6k/(3k)
COT:gold  comm.hedg long-short.000 (108k) (81k)
CEOinsider selling 22:1 25:1
off.&bd b/s.vs. 10% holder b/s .160:30 .160:30
3-box rev Bullish%-  71 70
US equity -ICI Fund Flows WeekDelay (3.3B)
MMF flows Change in $B 0 (47B)
MargDebt- top (300M) monthly  465B
ETF:mthlyEqty/ Int'l/Bond-$B 1280/457/320
2-yr Tsy Yield: Inflation 0.56% 0.48%
TIP (ETF) Inflation 113.95 114.05
**Holiday

 

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, April 6, 2015

GREEN VS. BROWN

Governor Jerry "Brown's" final legacy might be his necessary mandate to turn every household's lawn from green to brown, considering our prolonged drought. To his credit, however, he managed to help save my "watering" hole - Capp's Corner in North Beach- from being leased-out, since he lunches there monthly with his St. Ignatius H.S. buddies and supposedly pressured the landlord to be reasonable.

Also seemingly healthy (judging by today's action) is the stock market, now up nearly 200 points after a lousy employment number on Good Friday. Last week's numbers, ending on Thursday, showed reversals in breadth indicators - advance/declines, and the McClellan Oscillator, with increased New Highs. Other reversals include the  CEO Insider selling to much lower selling; and a large swing in MMF (money market) flows -from plus $17B to negative $47B!!

Lastly, the monthly figures for ETF assets came out - all at record inflows - stocks, bonds, and overseas investing. Here are the numbers:

Date> **4/2/2015 3/27/2015
Indices: DJIA  17763 17712
  NAZ  4886 4891
SPX  2066 2061
WklyVolume (Bshs). naz/ny…. **6.9/3.2 9.0/3.8
Specul.Ratio hi=bullish 2.16 2.37
Sentiment: put/call-CBOE  69 66
VIX>50-alltmlow=8.8 14.7 15.1
Advance/Dec-NYSE.. 2145/1070 1212/2014
Weekly Net: 1075 -802
     Cumulative: 166782 165707
Weekly  NYSE hi/low… 261/57 367/77
New Hi's/Low's Nasdaq h/l 237/125 274/130
McClellan  Oscillator 12 -12
McClellanSum .+750/-1000 380 357
Newsletter Inv.Intel -Bull 54.5 56.6
Surveys-Tues Bear:-5yrs 14.2 14.1
Wed. AAII  -Bull  35.4 38.4
Bear  32 24.4
COT:SPX w/w large/small (net)k 6k/(3k) 10k/3k
COT:gold  comm.hedg long-short.000 (81k) (53k)
CEOinsider selling 25:1 74:1
off.&bd b/s.vs. 10% holder b/s .160:30 160:40
3-box rev Bullish%-  70 70
US equity -ICI Fund Flows WeekDelay (4.5B)
MMF flows Change in $B (47B) 17B
MargDebt- top (300M) monthly  465B 445B
ETF:mthlyEqty/ Int'l/Bond-$B 1280/457/320 1219/424/308
2-yr Tsy Yield: Inflation 0.48% 0.60%
TIP (ETF) Inflation 114.05 113.42
**Holiday

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 30, 2015

BUY BYE

Contrary (!) to Main Stream Media (MSM) reports about the market declining over 2% last week on news of Yemen, ISIS, etc., Barron's Streetwise clarifies things a bit with the fact that U.S. stock Buybacks were at record highs in 2014 and continue to do so - in fact, the $1/2T amount in 2014 was more than the mutual funds and ETFs combined! However, they reverse just weeks before each quarterly earnings reports (such as last week) and resume during. Also contributing is window dressing before each quarter ending.

Another interesting factoid in the contrary/sentiment realm is that the Long futures are nearly as high as before the last major decline - and Barron's opines that Oil could fall to the 20s before rallying again - observable, but not actionable, yet.

Last week Sentiment Indicators were again mixed - the CBOE put/call ratio said BUY at week's end (48 to 66); newsletter surveys, which come out early (Tues and Wed.) were complacent. Gold shorters continued to drop!! CEO Insider selling leapt from 24:1 up to 74 to 1. Typical during Income tax time. Finally, MMF (money markets) reversed on the decline from negative $19B to plus $17B.
Here are last week's numbers:
Date> 3/27/2015 3/20/2015
Indices: DJIA  17712 18127
  NAZ  4891 5026
SPX  2061 2108
WklyVolume (Bshs). naz/ny…. 9.0/3.8 9.7/5.3
Specul.Ratio hi=bullish 2.37 1.83
Sentiment: put/call-CBOE  66 48
VIX>50-alltmlow=8.8 15.1 13
Advance/Dec-NYSE.. 1212/2014 2515/745
Weekly Net: -802 1770
     Cumulative: 165707 166509
Weekly  NYSE hi/low… 367/77 422/172
New Hi's/Low's Nasdaq h/l 274/130 395/168
McClellan  Oscillator -12 22
McClellanSum .+750/-1000 357 369
Newsletter Inv.Intel -Bull 56.6 52
Surveys-Tues Bear:-5yrs 14.1 14.3
Wed. AAII  -Bull  38.4 27.2
Bear  24.4 31.5
COT:SPX w/w large/small (net)k 10k/3k 11k/(56k)
COT:gold  comm.hedg long-short.000 (53k) (57k)
CEOinsider selling 74:1 .24:1
off.&bd b/s.vs. 10% holder b/s 160:40 .160:30
3-box rev Bullish%-  70 72
US equity -ICI Fund Flows WeekDelay (1.8B)
MMF flows Change in $B 17B (19B)
MargDebt- top (300M) monthly  445B Jan:
ETF:mthlyEqty/ Int'l/Bond-$B 1219/424/308 Jan:
2-yr Tsy Yield: Inflation 0.60% 0.59%
TIP (ETF) Inflation 113.42 113.76


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 23, 2015

HOPE AND FEAR

Any one who has traded options as well as entered March Madness Basketball pools knows the similarity of emotions with both: Hope and confidence at the start; day by day the hope turns to fear and disappointment; finally both end in loss, as expiry and the Finals occur. At least they both get your attention for awhile!The remedy for options is to SELL them, not BUY them; there is none for Basketball.

Being a "technical analyst" usually means being a Contrarian! This means going against the crowd. Last week was all about Chairwoman Yellen being "Patient" - I do not know if she meant wait awhile or visit the Doctor!

In Barron's this past week Scott Minerd writes the minority opinion (also mine) that interest rate hikes are actually GOOD for stocks, rising 6 months before as well as after the event.

Last week's Sentiment Indicators had these Contrarian gifts: The AAII (Individual Investor) Bears rose nearly 25% week over week; Insider Selling of CEOs has dropped recently (smart money); the Commitment of (futures) Traders also showed a big rise in S&P buying by large traders, with small traders  increased selling (see table below).

Most important was the backing off of smart selling by Gold Traders - finally- and the technical rise in gold recently (hoping it continues, as the $$ starts to weaken a bit after risin 25% the past year)

Here are the numbers:


Date> 3/20/2015 3/13/2015
Indices: DJIA  18127 17749
  NAZ  5026 4871
SPX  2108 2053
WklyVolume (Bshs). naz/ny…. 9.7/5.3 9.0/3.9
Specul.Ratio hi=bullish 1.83 2.33
Sentiment: put/call-CBOE  48 69
VIX>50-alltmlow=8.8 13 16.0
Advance/Dec-NYSE.. 2515/745 1411/1834
Weekly Net: 1770 -423
     Cumulative: 166509 164739
Weekly  NYSE hi/low… 422/172 180/222
New Hi's/Low's Nasdaq h/l 395/168 236/166
McClellan  Oscillator 22 -38
McClellanSum .+750/-1000 369 382
Newsletter Inv.Intel -Bull:tues 52 53.6
Surveys Bear:-5yrs 14.3 14.1
AAII  -Bull :wed. 27.2 31.6
Bear  31.5 25.4
COT:SPX w/w large/small (net)k 11k/(56k) 1k/(42k)
COT:gold  comm.hedg long-short.000 (57k) (89k)
CEOinsider selling 24:01:00 .20:1
off.&bd b/s.vs. 10% holder b/s .160:30 .160:45
3-box rev Bullish%-  72 71
US equity -ICI Fund Flows WeekDelay .3B
MMF flows Change in $B (19B) 18.2B
MargDebt- top (300M) monthly  Jan: 445B
ETF:mthlyEqty/ Int'l/Bond-$B Jan: 1219/424/308
2-yr Tsy Yield: Inflation 0.59% 0.66%
TIP (ETF) Inflation 113.76 111.51



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 16, 2015

TAKE A HIKE

The number one topic of finance media these days is when will the Fed hike rates after 6 years of Zero. The vast majority of talking heads opine that it will be the death knell for stocks - although I disagree, according to previous hikes. In this week's Barron's Steve Sears, the Option Guy, points out that stocks consistently rise before and after the hikes, based on average going back to 1955.

Recently I have been advising family and friends to invest for the long haul using either Vanguard or Schwab INDEX funds, preferably dividend ones. Fees from managed funds can eat up your retirement $$ all the way up to 66% going to them - per a Frontline program recently aired. Compounding annual fees! In fact, last week a spokesperson for S&P IQ (Standard & Poors staff) stated in an interview that the average managed mutual fund underperformed the Index 77 to 81% of the time since 2000; even small cap funds were weaker; and even in high volatility times - such as 2000 and 2008 they gained less.

With stocks regressing back to zero for the year last week (not counting today) Sentiment extremes looked hopeful. Contrarians like small traders increasing shorts to 40k, up from 22k; Insider selling by CEOs fell sharply from 71:1 over buyers to 20:1, even during Income Tax time.

Finally, mutual fund assets swung from $18B outflows to $18B inflows.

Here are last week's numbers:

Date> 3/13/2015 3/6/2015
Indices: DJIA  17749 17856
  NAZ  4871 4927
SPX  2053 2071
WklyVolume (Bshs). naz/ny…. 9.0/3.9 9.3/3.8
Specul.Ratio hi=bullish 2.33 2.45
Sentiment: put/call-CBOE  69 6
VIX>50-alltmlow=8.8 16.0 15.2
Advance/Dec-NYSE.. 1411/1834 843/2411
Weekly Net: -423 -1568
     Cumulative: 164739 165162
Weekly  NYSE hi/low… 180/222 362/98
New Hi's/Low's Nasdaq h/l 236/166 308/125
McClellan  Oscillator -38 -47
McClellanSum .+750/-1000 382 586
Newsletter Inv.Intel -Bull:tues 53.6 58.7
Surveys Bear:-5yrs 14.1 14.1
AAII  -Bull :wed. 31.6 39.8
Bear  25.4 23.4
COT:SPX w/w large/small (net)k 1k/(42k) 2k/(22k)
COT:gold  comm.hedg long-short.000 (89k) (123k)
CEOinsider selling .20:1  .71:1
off.&bd b/s.vs. 10% holder b/s .160:45 .160:35
3-box rev Bullish%-  71 75
US equity -ICI Fund Flows WeekDelay (1.9B)
MMF flows Change in $B 18.2B (18.6B)
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.66% 0.73%
TIP (ETF) Inflation 111.51 111.97


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 9, 2015

Storm Clouds

Traders in the stock market may want to think about hedging or at least watching stocks closely - we've had a great runup for 6 years (first time in history?). Several smart people are echoing this - Bill Gross says we have plateau'd; Jim Bianco sees economy slowing short term - snowstorms, dock strikes, lower oil earnings. Earnings forecasts as as negative as 2008 !!; the PMI index (Purchasing managers ) as low as '09.

On the plus side - Steve Sears of Barron's echoes my thoughts of stocks rising as interest rates do - before, during and after; our friend from the north (Santa Rosa) Charles Biderman of Trim Tabs says a record stock buyback happened in Feb.

Sentiment-wise - Today's bounceback reaffirms my McClellan Oscillator oversold number at -47 (usually around minus fifty in this short term Advance/Decline chart calls for at least a bounce; Gold is still seeing huge short sellers, and the 2-year Treas. yield jumped to a near record of 0.73, but the TIPs dropped over two points.

Here are the numbers:
Date> 3/6/2015 2/27/2015
Indices: DJIA  17856 18132
  NAZ  4927 4963
SPX  2071 2104
WklyVolume (Bshs). naz/ny…. 9.3/3.8 9.2/3.7
Specul.Ratio hi=bullish 2.45 2.49
Sentiment: put/call-CBOE  6 63
VIX>50-alltmlow=8.8 15.2 13.3
Advance/Dec-NYSE.. 843/2411 1714/1541
Weekly Net: -1568 173
     Cumulative: 165162 166730
Weekly  NYSE hi/low… 362/98 419/55
New Hi's/Low's Nasdaq h/l 308/125 343/98
McClellan  Oscillator -47 9
McClellanSum .+750/-1000 586 643
Newsletter Inv.Intel -Bull:tues 58.7 59.5
Surveys Bear:-5yrs 14.1 34.1
AAII  -Bull :wed. 39.8 45.4
Bear  23.4 20.3
COT:SPX w/w large/small (net)k 2k/(22k) 2k/(16k)
COT:gold  comm.hedg long-short.000 (123k) (136k)
CEOinsider selling  .71:1 .68:1
off.&bd b/s.vs. 10% holder b/s .160:35 .150:30
3-box rev Bullish%-  75 74
US equity -ICI Fund Flows WeekDelay 0
MMF flows Change in $B (18.6B) 10.3B
MargDebt- top (300M) monthly  445B
ETF:mthlyEqty/ Int'l/Bond-$B 1219/424/308
2-yr Tsy Yield: Inflation 0.73% 0.63%
TIP (ETF) Inflation 111.97 114.06

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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