Monday, July 17, 2006


Since early May, the DJIA has lost nearly 1,000 points, with the Nasty Nasdaq down 13%. Despite last week's slaughter, not all Sentiment Indicators reflected a cathartic Fear or Climactic Volume - which tells me the bottom is still not in, although an oversold Summer rally could set in.
The exceptions that were showing defensive hedging/concern were mostly option related: the CBOE Equity put/call ratio at a high 76 (although the ISEE call/put was not excited, at 127 -scarcely above last week's 124), and the VIX went back up to 18 from 13.
The McClellan Oscillator went down through the zero line to - 23 (support @ -50) and the Summation remained in negative territory at -154.
Finally, market newsletter surveys backed off slightly as did the Panic/Euphoria Index, while shorting - by Public vs. NY Specialists and short interest -remained high.
Option expiration occurs this Friday, so expect volatility.

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