W(H)ITHER GOEST THOU, DOW?

As the Dog Days of Vacation come to an end on lower Volume, the DJIA finds itself bound by the same old Trading Range, bouncing off the 10,400 area (although unlike the SP500 and Nasdaq it did break the 200-day MA), even with the hurricane catastrophe. Oil prices spiked to almost $70, but settled back as Bullishness on Oil is at extreme highs, connoting at least a temporary respite, with Summer traveling ending.
Although we've had a nice Summer rally going back to April, several Sentiment Indicators are still showing an upward potential after the August decline: the CBOE put/call ratio is quite high at 65 (a combination of put buyers hedging their gains and those speculating on a downmove); the McClellan Oscillator is still in the low range of -39, and the I.I. Bears hit 25 for the first time since early June (with the AAII Bears dropping back to 31 after last week's aberration); the Rydex Nova/Ursa fund ratio fell back to April's 18 level, and Barron's new Panic/Euphoria Index fell below the -.30 line at -.42.
Lastly, the Public to Specialist shorting ratio, after screaming to new highs of over 3.6 last Spring, again broke up through the 3.0 level (per IBD), and the NYSE short interest ratio hit a 2005 new high (5.91) last seen with October's 5-year high of 6.78.
Beware the conventional wisdom (an oxymoron?) of Sept.-Oct. always being the worst 2 months of the year for the market, widely disseminated by WSJ, CNBC, et.al.

TUTORING/COACHING:

After 5 years of teaching Technical Anaylsis at Golden Gate Univ.'s graduate division, and 20 years of investing/brokering, I have decided to make myself available for tutoring/coaching - prompted by an exceptional investing year in a flat market (22 gains, 4 losses in my trading IRA). These sessions will be held at a comparable rate of my Trombone coach, massuese, and golf pro - $80/hour (tutoring); $50/ 1-2 hour (coaching, repairing, critiquing). Anyone interested can contact me at :leonbrnt@aol.com or 415-673-6488 Brent L. Leonard, CMT

BUBBLE,BUBBLE, OIL IN TROUBLE?:

Wachovia analysts report that the Bullishness on Oil prices is now a recent record high of 81.5%, a big number in any survey. Although a correction is due, it's probably not the end of the secular move, considering all the Supply and Demand factors. With the housing/homebuilders group also topping out, leadership in the total market is suspect, although a couple Indicators are still showing a Bullish rally might ensue following this August correction we've just experienced:
Although the benchmark Investor's Intelligence Bull/Bear survey is still complacent at 57%, the AAII (Individual Investors) has slipped 10 points to 29.3 with 40% Bears crossing up through, a rarity. And IBD's Public/Specialist shorting just broke through the 3 level at 3.06 exhibiting the caution necessary for at least short rallies. The McClellan Oscillator posted a -40 reading, near the bottom of a "normal" correction range. Finally, the Nova/Ursa ratio slipped under 20 to 19, last seen in April's rally beginning, and before that - October.

CROWNING ACHIEVEMENT:

In what technicians call a CROWN, the DJIA seems to be rolling over in a failed Summer rally, not even reaching the highs of Spring. Although, as noted the last week or so, several Sentiment Indicators have reached toppy areas, the market needs this congestion, or Trading Range, to mount a successful downward move. Just as in upward Accumulations, topping Distributions need the "Effort" to create the "Result", although occasional V-spikes do occur after crises. Market leaders home builders and energy stocks led the way down in pre-option expiry profit-taking - time will tell if they are in a corrective mode, or if it's the end of the dance.
Indicators still at extremes this week include the CBOE Equity put/call ratio still at 61, Investor's Intelligence (I.I.) even more Bulllish ( a Bearish sign) at 59 Bulls with Bears at only 19%. Bullish per cent at 73 is coming off its high in the toppy zone.

ENDLESS SUMMER?

The Summer rally, which was suspect due to lack of Volume and the few number of stocks leading it, finally came to at least a short term end last week. Many of the Sentiment Indicators foretold it the last week or so:
The CBOE put/call ratio reached 60 the previous week (and 61 last week); and the ISEE call/put ratio hit its alarm of over 200 (206) - 205 two weeks ago. My cumulative Advance/Decline number hit a stratospheric 66,465 before backing off last week; and the McClellan Oscillator reached a minus 47 this past week (-50 seems to be the normal turnaround level), and the Summation had hit 940 the previous week (+1,000 serves as its upper limit).
Bullish surveys were hitting high levels of 57 (I.I.,AAII, and Market Vane) with AAII Bears at only 17.7%; the new Barron's Panic/Euphoria chart also broke above the Panic line of -.30 for the first time at -.27, followed by -.29. And most importantly, the Bullish Percent topped out at its usual range of 74-75 stocks on Buy signals.
Technically, the Industrials also reached its Resistance level just under 10,700. Hopefully the correction will take a breather at minor Support levels of 10,420 (DJIA); 2160 (Nasdaq); and 1215-20 SPX, while the largerr stocks sit on the 200-day MA.

I'm "Baaaaaaack"!

After 1 week vacation and major back/spine surgery, both of which prohibited updating mktsentiment.com ( I prefer vacation), I notice that not much has changed in these low volume dog days of Summer. Despite a steady bullish rise since late June, to current heights of June 17's 10,656, not much has changed inthe Sentiment world.
My cumulative adv/dec total seems way overextended to new highs of 66,465 but the steady climb of A/D and New Hi's/Lo's is weakening, as is the Dollar. This past week the CBOE Equity put/call ratio spiked up to 60, which is Bullish, and the VIX jumped up aa point to 11.57 (10%). The Bullish percent has reached a toppy level of 74 (74% of stocks in the S&P500 on a BUY signal), and the Smith Barney Panic/Euphoria Index finally broke out of Panic at -0.27, but a +6 is needed for Euphoria.