Monday, February 27, 2006

O Really! A Rally?:

With most of the Sentiment Indicators still braindead, echoing an upward bias to a Trading Range since early November (SPX in the 1200s; NAZ in the 2200s), we have to fall back on market momentum - which currently seems strong. At least until we end the month and the first 4 days of March.
New Highs to New Lows on the NYSE were more than 10:1, and the Panic/Euphoria Index is at a low -.66, signaling positive action. Although Volume could be stronger, recent action of Financials, large cap Techs and Industrials bode well for market strength (even absent oil and gold/metals) - at least as long as IRA and income tax money holds out.
The distant clouds of sub-prime mortgage rate hikes are threatening, as are the McClellan Summation loftiness and length of the current rally from October. Otherwise little change has occurred as Indicators have reverted to the mean.

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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