Monday, January 16, 2006


January, named for Janus, can't make up its mind which way to direct the stock market. First it charges out of the chute in record numbers (with new pension, bonus, IRA, etc. money fueling it) as shown by over 10 to 1 new highs for 2 weeks, and cumulative A/D breadth also screaming up. Then everything all of a sudden looks toppy: the McClellan Summation Index is over its normal resistance range (although it's been up to 1500 before) at 686; newsletter surveys are rampantly bullish at 56 for the I.I., 59 bulls (up from 29 last week) vs 19 bears (down from 40) on the AAII; Market Vane hit a record 73 bulls!Barron's chart of Smith/Barney's Panic - Euphoria Index is still slightly under water (-0.30) at -0.35 but fading fast. It's right at the level of the last 3 previous tops, as is the Bullish Per Cent at 73 ( % of stocks on Buy signals). Finally, Barron's reports that hedge fund managers are more long now than 98% of the last 5 years; also in record numbers - Nasdaq long futures.Speaking of Barron's, they grudgingly put out last year's Roundtable results of stock picks by their 12 dwarfs (gurus). As I said in my last Marina Times column: "He who cuts his own wood is twice warmed", meaning one should do their own research on stocks, as borne out by the results! Only 1 of the 12, Meryl Witmer was successful in their picks - 4 for 4, up double-digits. Those who shorted got killed! So much for expert advice.

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