Monday, August 21, 2006


Reminiscent of the TV comedy news show many years ago, last week certainly was unusual, although considering this time of year, light Volume whipsawing and option expiry one could expect something.
As any veteran trader knows, there is quite a difference between Analysis and Trading - you can be right on one and wrong on the other. Last week's blog called for a rally based on oversold Sentiment numbers, but the rally might also be due to the fact that I went totally flat to go on vacation after being soured on all Sectors .
I also wrote about the Trading Range from 10,700 to 11,300 on the DJIA, which seems to have again bounded price action, as the post-expiration Monday reverses almost all of last week's moves with profit-taking.
Looking ahead, the only powerful sign is the Barron's Panic/Euphoria master indicator down to a Bullishly low -0.75, the area of previous major lows. Most others have backed off from the week before's extremes, with the McClellan Oscillator bumping up to the +50 Resistance level.Both the VIX and CBOE Equity put/call ratio dropped precipitably, as did the Public shorting ratio.Nimble trading or keeping the powder dry seems to be the order of the day, at least until Labor Day.
Mktsentiment.blogspot 8/18/2006 4Yr.HI LOW
DJIA 11381 11577 7286
Nasdaq 2163 2243 1114
S&P500 1302 1325 776

CBOE Equity 60 87-5/04 46-1/03
put/call ratio

VIX 11.6 44-9/02 10.3-7/05

ISEE-call/put 77 299-12/04 82-4/02

McClel Osc.(+75/-100) 45 91-5/04 (81)-5/04
McClelSum.(+750/-1000)` 393 1568-6/03 (726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 40.9 62.9-12/04 35-6/06
Bear:43.2/16.1--5yrs 36.6 38.2-3/03 16-6/03

AAII-Bull/Bear 30.5/35.8 n/a n/a
MarketVane Bulls 64 73 24

Barron's Panic/
Euphoric Master Idx -0.75 -0.24 4/06 -0.75 11/05

Bullish%- (.82%/12%) 54 88 -2/04 46-8/04

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