Monday, March 6, 2006


Usually one would expect up markets at the first part of a month when IRA contributions, Income Tax refunds, etc. flow in. Although most of the Sentiment Indicators have been boringly regressing to the mean, reflecting the steady, albeit rising, Trading Range we've been in below the 2000 all time highs on the Dow 30, a couple of longer term ones have appeared on my radar: the Bullish Per Cent, now at 67, usually falls materially after a top, as does the A/D based McClellan Summation Index, now at a high 665. Funnily enough, the NYSE Adv vs. Decls were dead even last week at 1751 to 1753, although that closed-end fund-ridden entity had 508 New Highs vs. only 71 New Lows.
But before this semi-annual "Bull" period is done there is hope for a rally with the Investors' Intelligence surveys starting to look oversold as it contracts like the Bollinger Bands, hopefully even inverting - it is now 42.6 Bulls to 30.8 with the AAII similar.
Another Bearish extreme is the Nasdaq to NYSE Volume, critically high at 153 (speculative). Recently I've been keeping track of the SPX traders' commitment but so far haven't enough sample data to find it revelatory or consistently reliable.
Only a couple of signals made major percentage moves, to the Bullish camp, they being the Barron's Panic/Euphoria Index, rising from the depths of -0.66 to -0.51; likewise, the Public shorting vis a vis Specialists, fell off from 5.97 to 4.16, nearly a third. These seem to echo the increased volatility recently imposed by the Hedge Fund crew, trying to make money after a dismal '05.

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: 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 Zero (IN)Tolerance

Subscribe in a reader


No comments:

Post a Comment