Monday, October 9, 2006


One of the most reliable technical signals has acceded to the media curse - that of September being the cruelest month for the market and, for 50 years, October in the 4-year Presidential cycle always does a V-Spike selloff before rallying into yearend.
Somebody forgot to tell the markets, which have gone straight up since August (maybe the spike came early this year -during the summer).
Sentiment Indicators on the whole do not show signs of an immediate turndown, although it is always prudent to be cautious this time of year, as Mutual Funds begin their yearly adjustments.
The Dow 30 keeps making new highs ( although no other Indices are), which means buy-and-holders of 7 years ago are finally even again, except for Inflation. Not so for the four-letter words/stocks! They're not even halfway back.
Last week's breadth, as measured by new highs and Advance/Declines is getting stronger. The Panic/Euphoria index is very bearish (great for the markets) at -0.68, and the AAII Bull/Bear survey numbers actually inverted:37.8 vs. 46.7.
The Investor's Intell. and Market Vane, however, tell a different story. Both the Bullish per cent (still on a strong Buy signal) and the Nasdaq Comp are approaching the top of their range from last winter. The McClellan Summation is also quite high.

Mktsentiment.blogspot 10/06/2006 ..... 4Yr.HI ...... LOW
DJIA 11850 11577 7286
Nasdaq 2299 2243 1114
S&P500 1349 1325 776

CBOE Equity put/call ratio 66 87-5/04 46-1/03

VIX 11.5 44 9/02 10.3-7/05

ISEE-call/put 110 9-12/04 82-4/02

McClel Osc.(+75/-100) 6 91-5/04 (81)-5/04
McClelSum.(+750/-1000) 768 1568-6/03 (726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 49.5 62.9-12/04 35-6/06
Bear:43.2/16.1--5yrs 33.3 38.2-3/03 16-6/03

AAII-Bull/Bear 37.8/46.7 n/a n/a
MarketVane Bulls 70 73 24

Barron's Panic/
Euphoric Master Idx -0.68 -0.24 4/06 -0.75 11/05

Bullish%- 68 88 -2/04 46-8/04

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