YOU SNOOZE, YOU LOSE:

Recent columns have dealt with Closed-End Bond Funds, especially munis, that sell off at year-end and are bought back after the new year. Last Friday, on the Nightly Business Report, the CEF guru - Thomas Herzfeld - was interviewed about these and, although he echoed my comments, he did have different funds to recommend: symbols JQC,HTD,PIF,SCD,PBF,EVG, and HIX. Also, in Barron's over the holiday weekend, Bill Gross of PIMCO also made mention of this tax-loss occurrence, citing his own funds (which are not at a discount) and VKA, which is.This anomaly occurs again , usually in the March/April timeframe, so one should use their Technical tools for entry and exits, although 6% tax-free isn't a bad hold.
Not much changed in the Sentiment picture during the quiet week, with some improvement by the CBOE put/call ratio to 62, the McClellan Oscillator moving up through the zero line to 16; the AAII Bears improved a bunch up to 28.2, as the Bulls pulled back to 41.
The real standout was Public to Specialist shorting which shot up to a 12-month, even 5-year high of 5.68 - unless this is some kind of glitch number by IBD. It could also reflect yearend window dressing, but it shares the caution with the CBOE number.
Happy New Year - here's hoping for the Santa Claus rally this week and into next.

HOME IN THE RANGE:

That elusive 11,000 level in the DJIA still is not in the cards so far this year, as we bump our heads on that cieling. Maybe the Holiday spirit(s) are making us too complacent as the I.I. survey reaches another high for the Bulls at 58.8 with the Bears at 21.6; While the AAII slipped a bit, the Market Vane Bulls remained at 70.The CBOE put/call ratio is down to 53, while the VIX touches 10 - the most complacent in a decade.
The McClellan Oscillator dropped down through the zero line (Bearish) to -21 - would like to see it reach the -50 level for a rally. The Bullish per cent is toppy at over 71The ISEE option call/put ratio ended the weekat 186, but rose on Monday to 233 (ouch)!
Odd-lot shorting does remain double last year even though earnings surprises and estimates are hugely positive for the week.Let's hope we at least get the Santa Claus rally between Xmas and New Year like we have for the past 8 out of 8 years!Happy Holidays to all!!!

RED CHRISTMAS (WHOOPS-HOLIDAY):

IBD's Short Interest ratio on the NYSE is 5.26, quite Bullish. Although it set up the October rally with the new high of over 6, the previous '05 new high was only 3.47 back in April's market bottom. 5-year high is still 6.78. NYSE Public to Specialist shorting is still high, but dropping, at just over 3.

But dangerously complacent, precluding an immediate rise are the CBOE Equity put/call ratio at 61, and the Inv.Intell. Bull/Bears spread still widening at 56.2 vs. 21.9. Similarly, the Mkt Vane Bulls hit 70 for the first time in a while, as the AAII surveys also recorded dreaded complacency at 19 Bears with Bulls at 49.5.
For what it's worth, the Univ. of Michigan Confidence survey shot up nearly 10% to 88.7 - Ah! Christmas... The Rydex Funds Nova/Ursa is relatively high at 23, the same topping level reached last late July which ended the Spring Rally. Further danger is seen by the Bullish per cent Pt.& Fig. chart breaking 70 - the % of stocks on a Buy signal. Still not topped out, but flying the yellow flag.
The final Bearish nail is the ISEE call/put ratio, over the Bearish level of 200 at 211 ( remaining at 213 on Monday, the 12th). Finally, Barron's reports that with a large number of corporate Insiders selling, the most vulnerable is the Retail group with 6 to 10 times normal - shoppers! let's get out there and spend!!!

DECEMBER 2 - A WEEK THAT WILL GO DOWN...

in the stock market, according to Tom McClellan - and he was right. He called the Nov. 28 top of the recent rally in his newsletter , and although he said the cyclical bottom would occur Dec. 5, today's rally doesn't convince me until a preponderance of Sentiment Indicators turn more negative.
Although NYSE Short Interest is double that of a year ago, complacency still runs rampant especially in the Bullish Per Cent Pt. & Figure chart at 68, nearing a topping zone; I.I., or Investor's Intelligence, measure a 55.8% Bullish to 21.1% Bear ratio (as does the AAII survey), a large spread. The Rydex Nova/Ursa climbs higher, to 23, still in a medium range boding well for longer term. Worst of all is the McClellan ratio-adjusted Oscillator coming off its toppy 51 last week to only +27 Friday - hardly a bottom.
Holding fast are the IBD short interest ratio and Public/Specialist at nicely high levels, and Mutual Fund Cash took an upturn at 4.6%.
Hopefully, once this Institutional year-end Selling is over, the rally will resume, culminating in a Santa Claus rally between Christmas and New Year's, as it has for 8 of the last 8 years. What should really clear things up in the financial markets is the fact that the number of Economists has increased 30% to 30,000 in the U.S. Former Pacific Coast Exchange Lee Korins once described an Economist as one who was good with numbers but didn't have the charm or charisma to become an accountant!