Monday, May 2, 2016

OOPS!!!

Maybe investors should go away in May, but this year I was unable to do so, thanks to a slight case if SHINGLES ( I don't even own a House!!) that kept me from travelling this year due to possible contagion. However, signs of market weakness abound these days:

Breaking News: In today's TV interview, Charles Biderman,  of TrimTabs in Santa Rosa, probably the best data analyzer next to Ned Davis and Bespoke Group, announced they were 100% in Cash, just as in early 2016. His reason is that in recent months $$ flows into equities by retail and institutions were net ZERO, so all market movers came from corporate stock Buybacks, although that has dropped as of March.
Another startling fact I observed in Barron's this weekend was the correlation (albeit small sampling of 4) between their Insider Selling peaks and the SPX tops over the past year -May, July, October, now. The Option column states that institutions bought 99,000 SPX calls to hedge VIX calls (against a market decline, and another 330,000 calls as well).
Sentiment Indicators last week showed a high and toppy Delta MSI rising stock level of 85 (same as last week) and a high Bullish%; the McClellan Summation is at a high level over 1200; and the Inv. Intell. Bull to Bear ratio is wildly Bullish, by a 24 point margin (complacency).
Whether to Sell in May or hedge and ride it out is the quandary. One way might be to do a Buy/Write on the VIX ETF - UVXY, as the Implied Volatility on the calls are Huge - 150 (lots of premium to sell)..
Here are the numbers:
Date> 4/29/2016 4/22/2016
Indices: DJIA  17773 18003
NAZ  4775 4906
SPX  2065 2091
WklyVolume (Bshs). naz/ny…. …...9.8/5.1 ……..8.9/4.8
Specul.Ratio hi=bullish 1.92 1.85
Sentiment: put/call-CBOE  68 69
VIX>50-alltmlow=8.8 15.7 13.2
DeltaMSI-50% MAC crossover 85% 85%
Advance/Dec-NYSE.. 1639/1528 2143/1037
Weekly Net: 111 1106
     Cumulative: 166299 166188
Weekly  NYSE hi/low… 270/25 336/27
New Hi's/Low's Nasdaq h/l 207/93 192/77
McClellan  Oscillator -9 25
McClellanSum .+750/-1000 1215.0 1168
Newsletter Inv.Intel -Bull 44.3 47.4
Surveys-Tues Bear:-5yrs 20.6 21.7
Wed. AAII  -Bull  27.4 33.4
Bear  28.6 23.9
US$-WSJ 93 95.1
3-box rev Bullish%-  76 78
US equity -ICI Fund Flows weekLate (4.2B)
MMF flows Change in $B 10.3B (32.9B)
MargDebt- top (300M) monthly  446B
2-yr Tsy Yield: Inflation 0.78% 0.82%
TIP (ETF) Inflation 114.9 113.8


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 25, 2016

SELL IN MAY AND GO AWAY

Per usual, I need to head for the hills of Lake Tahoe and Redding, CA to family bond and celebrate my birthdate - Friday the 13th - with my brother's ma-in-law's 96th. Being data dependent, blogs will not be forthcoming for awhile.

Near term and all time peaks abound : the DJIA and SPX approaching last year's highs; Barron's chart of Insider Transaction spiking as with previous tops in April '15, July and Oct.

Breadth has been very strong lately - Advance/Declines (cumulative near tops); stocks on BUY signals -Bullish % and Delta MSI;    VIX with a 13 handle (complacency). NYSE new highs to lows beat the 10:1 ratio last week; even newsletter surveys, reporting midweek, are wildly Bullish - a contrary indicator.
Here are the numbers:

Date> 2016 4/22/2016 4/15/2016
Indices: DJIA  18003 17897
  NAZ  4906 4938
SPX  2091 2080
WklyVolume (Bshs). naz/ny…. 8.9/4.8 8.5/4.8
Specul.Ratio hi=bullish 1.85 1.77
Sentiment: put/call-CBOE  69 65
VIX>50-alltmlow=8.8 13.2 13.6
DeltaMSI-50% MAC crossover 85% n/a
Advance/Dec-NYSE.. 2143/1037 2503/664
Weekly Net: 1106 1839
     Cumulative: 166188 165082
Weekly  NYSE hi/low… 336/27 276/20
New Hi's/Low's Nasdaq h/l 192/77 140/74
McClellan  Oscillator 25 16
McClellanSum .+750/-1000 1168 1020
Newsletter Inv.Intel -Bull 47.4 41.2
Surveys-Tues Bear:-5yrs 21.7 27.8
Wed. AAII  -Bull  33.4 27.9
Bear  23.9 24.9
US$-WSJ 95.1 94.7
3-box rev Bullish%-  78 77
US equity -ICI Fund Flows weekLate (4.3B)
MMF flows Change in $B (32.9B) (7.7B)
MargDebt- top (300M) monthly 
2-yr Tsy Yield: Inflation 0.82% 0.74%
TIP (ETF) Inflation 113.8 114.3


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 18, 2016

V FOR VOLATILITY

Other than the Warriors' expected victory, the high point of  this past weekend was a 2-hour class/tutorial (free) at the S F Options Group meetup at Fort Mason by Richard Lehman on Options and Volatility - Outstanding - I even bought his and Larry McMillan's book: Options For Volatile Markets! What I learned most was to abandon my hedging positions of TVIX (which has no options, and has broken down below its longterm Support) in favor of UVXY which, just as NUGT for gold miners, has HUGE IV or Implied Volatility - which is the "juice" one sells to make big bucks.

It was great to see old friends again, after my recoop time from knee replacements, and even got an invite to give my DITM (covered call) talk to the Silicon Valley Option Group sometime this summer.  Although I discovered this income strategy (in a zero interest rate world) back in 2009, it seems to me more timely now, as the Bull market wears down, and rates seem to be destined to stay low ( even negative??).

Last week's Sentiment Indicators were very similar to the previous week's dramatic one, with the McClellan Summation (of the weekly Oscillator) again breaching the 1,000 mark - Positive Advances/Declines. If breadth continues strong it can (eventually) break up through the indices all-time highs. DJIA 18,351 (today 17.968); S&P 500 2,134 (today 2089).
Here are today's numbers:

Date> 2016 4/15/2016 4/8/2016
Indices: DJIA  17897 17576
  NAZ  4938 4850
SPX  2080 2047
WklyVolume (Bshs). naz/ny…. 8.5/4.8 8.6/4.5
Specul.Ratio hi=bullish 1.77 1.97
Sentiment: put/call-CBOE  65 68
VIX>50-alltmlow=8.8 13.6 15.4
DeltaMSI-50% MAC crossover n/a 74%
Advance/Dec-NYSE.. 2503/664 1225/1958
Weekly Net: 1839 -733
     Cumulative: 165082 163243
Weekly  NYSE hi/low… 276/20 277/47
New Hi's/Low's Nasdaq h/l 140/74 126/91
McClellan  Oscillator 16 -17
McClellanSum .+750/-1000 1020 940
Newsletter Inv.Intel -Bull 41.2 45.4
Surveys-Tues Bear:-5yrs 27.8 27.8
Wed. AAII  -Bull  27.9 32.2
Bear  24.9 21.5
US$-WSJ 94.7 94.2
3-box rev Bullish%-  77 76
US equity -ICI Fund Flows weekLate (5.3B)
MMF flows Change in $B (7.7B) (26.7B)
MargDebt- top (300M) monthly 
2-yr Tsy Yield: Inflation 0.74% 0.70%
TIP (ETF) Inflation 114.3 116


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 11, 2016

ETFs - WTF?

This week's Barron's financial magazine profiled the best of Dividend ETFs and Schwab's came out on TOP! I've been recommending this one-  SCHD - for my family and those who are not zoned in on the investment scene. Regular contributions benefit from compound interest - the 8th Wonder of the World - especially if the market drops (buying more shares!).

Also #1 on the list of first quarter ETFs/stocks: the NUGT, which is 3 X the DGX ETF, or gold miner stocks. It was up 140% and is still rising. The huge Volatility cuts both ways - Up and Down, so it is quite dangerous, if not hedged . However, using my DITM (deep-in-the-money covered calls) lessens the risk.

Finally, another highly recommended choice - CEFs or Closed-End Funds (munis) -which  I've owned and recommended for years, are both lucrative and relatively safe.

All of these could unwind (temporarily) When (not If) the stock market tanks - which is why I recommend another 2 X ETF - the TVIX, which "should" rise dramatically as stocks tank. Handle with Care!
Last week's extreme Sentiment Indicators were again mixed, with the 2-year Treas. dropping while the TIP hit new recent highs; the dollar is dropping - helping both gold and U S stocks overseas.
Here are the numbers:
Date> 2016 4/8/2016 4/1/2016
Indices: DJIA  17576 17792
  NAZ  4850 4914
SPX  2047 2072
WklyVolume (Bshs). naz/ny…. 8.6/4.5 8.4/4.5
Specul.Ratio hi=bullish 1.97 1.87
Sentiment: put/call-CBOE  68 64
VIX>50-alltmlow=8.8 15.4 13.1
DeltaMSI-50% MAC crossover 74% 71%
Advance/Dec-NYSE.. 1225/1958 2299/889
Weekly Net: -733 1410
     Cumulative: 163243 163976
Weekly  NYSE hi/low… 277/47 376/31
New Hi's/Low's Nasdaq h/l 126/91 159/105
McClellan  Oscillator -17 13
McClellanSum .+750/-1000 940 1075
Newsletter Inv.Intel -Bull 45.4 43.3
Surveys-Tues Bear:-5yrs 27.8 28.9
Wed. AAII  -Bull  32.2 27.2
Bear  21.5 25.8
US$-WSJ 94.2 94.6
3-box rev Bullish%-  76 79
US equity -ICI Fund Flows weekLate (3.7B)
MMF flows Change in $B (26.7B) 13.9B
MargDebt- top (300M) monthly  436B
2-yr Tsy Yield: Inflation 0.70% 0.74%
TIP (ETF) Inflation 116 114.7


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, April 4, 2016

T For TWO

Previously mentioned TVIX for hedging still looks like a viable option, although it has never been this low (barely breaking below $5). It echoes the VIX 2-fold, which is also weak recently, but the ETN, based on expiring futures, usually does lose money y/y. However, based on chart activity, it should scream up if the market tanks - last Sept. it hit $20 - 4 X its previous average level.

Sentiment Indicators are anything but boring these days:  The TIP (Inflation indicator) hit a recent high at 114, while the 2-year Treas. dropped a bunch - .89% to .74%. MMF flows went from minus $15B to plus $14B in a wild swing. The McClellan Summation Index came off a 1000 level ( a rara avis); the Bullish % - stocks on a BUY signal are at a high 79%, while the $ weakens.
Finally, the Bullish signs include my newly acquired Delta MSI from Barron's - stocks breaking up through their 50- MA; and the NYSE Hi to Los were more than 10:1...

Here are the numbers:
Date> 2016 4/1/2016 3/24/16*
Indices: DJIA  17792 17515
  NAZ  4914 4773
SPX  2072 2035
WklyVolume (Bshs). naz/ny…. 8.4/4.5 6.4/3.4*
Specul.Ratio hi=bullish 1.87 1.88
Sentiment: put/call-CBOE  64 82
VIX>50-alltmlow=8.8 13.1 14.7
DeltaMSI-50% MAC crossover 71% 69%
Advance/Dec-NYSE.. 2299/889 1055/2113
Weekly Net: 1410 -1058
     Cumulative: 163976 162566
Weekly  NYSE hi/low… 376/31 166/27
New Hi's/Low's Nasdaq h/l 159/105 101/96
McClellan  Oscillator 13 -5
McClellanSum .+750/-1000 1075 990
Newsletter Inv.Intel -Bull 43.3 47.4
Surveys-Tues Bear:-5yrs 28.9 27
Wed. AAII  -Bull  27.2 33.8
Bear  25.8 23.7
US$-WSJ 94.6 96.1
3-box rev Bullish%-  79 76
US equity -ICI Fund Flows weekLate (2.1B)
MMF flows Change in $B 13.9B (14.8B)
MargDebt- top (300M) monthly  436B 447B
2-yr Tsy Yield: Inflation 0.74% 0.89%
TIP (ETF) Inflation 114.7 113.2



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, March 28, 2016

BAD BREADTH

After a huge market runup for 5 weeks, stocks look a bit tired, breadth-wise (advances and declines). The McClellan Summation Index is dropping from its near-highs (@ 1000), and its Indicator has dropped from +60 to minus 5 in the past week; the NYA Index of New York stocks is making lower highs and lows after its all-time high last summer.

OTOH (on the other hand) my newly found Indicator, the Delta MSI is showing a high (69) Bullish number as is the Bullish % - stocks on a buy signal. So the picture, once again, is mixed.

Duke U. ( Ducks recent adversary in the NCAAs) Finance school - Fuqua - say that fast 3 times- reports that a poll of CFOs say the minimum wage hike will: cut hiring (75% polled), result in layoffs (75%), cut into employe benefits (66%) and hike prices (50%). 1/3 of these Finance Officers also see a Recession in 2016.

Here are last week's sentiment #s:

Date> 2016 3/24/16* 3/18/2016
Indices: DJIA  17515 17602
  NAZ  4773 4795
SPX  2035 2049
WklyVolume (Bshs). naz/ny…. 6.4/3.4* 9.6/6.3
Specul.Ratio hi=bullish 1.88 1.52
Sentiment: put/call-CBOE  82 66
VIX>50-alltmlow=8.8 14.7 14
DeltaMSI-50% MAC crossover 69% 61%
Advance/Dec-NYSE.. 1055/2113 2271/907
Weekly Net: -1058 1364
     Cumulative: 162566 163624
Weekly  NYSE hi/low… 166/27 248/37
New Hi's/Low's Nasdaq h/l 101/96 146/147
McClellan  Oscillator -5 60
McClellanSum .+750/-1000 990 917
Newsletter Inv.Intel -Bull 47.4 44.4
Surveys-Tues Bear:-5yrs 27 30.3
Wed. AAII  -Bull  33.8 30
Bear  23.7 26.9
US$-WSJ 96.1 95.1
3-box rev Bullish%-  76 76
US equity -ICI Fund Flows weekLate (.2B)
MMF flows Change in $B (14.8B) (40B)
MargDebt- top (300M) monthly  447B
2-yr Tsy Yield: Inflation 0.89% 0.84%
TIP (ETF) Inflation 113.2 113.6


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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