Monday, October 16, 2006


So when does this parabolic upthrust end? We all know the bricks in the Wall of Worry -interest rates, Iraq, economy, housing. In stark contrast to the seasonal normal, the markets have ignored history (so far), and as if there were a deus ex machina lifting all boats ( Hedge funds, ETFs -whose inflows were $6B last week, although without them equity flows were negative-, or the Republicans?).
NYSE new highs to lows were 558 to 25, and my own cumulative A/D reached all-time highs of 83,805. Still, NYSE Volume remains between 1.2B and 1.5B shares, not at all heavy. Although the DJIA is making new highs (although well off its 2000 inflation-adjusted highs) other Indices, such as the NYSE and Nasdaq comps are bumping up on last April/May's highs, a Resistance area.
As for the Sentiment readings, they're as wacky as I've ever seen them. Most show evidence of the past strong runup, but have entered the "toppy" zone - such as the McClellan Summation Index at 835; also, the Bullish per cent at 71 nears previous recent tops.
The Bull/Bear spread for the Investors Intelligence has gone from 4 in August to 22, at 52/30; likewise the AAII flip-flopped from an inverse 37/46 to 49/37, as the Market Vane climbs to a toppy 72. Conversely, the Citi Panic/Euphoria master indicator is Bullish at -0.67, as are the Specialist to Public shorts and short interest.
Here are the indicators:

Mktsentiment.blogspot 10/13/2006 4Yr.HI LOW
DJIA 11960 11577 7286
Nasdaq 2357 2243 1114
S&P500 1365 1325 776

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

VIX 10.75 44 9/02 10.3-7/05

ISEE-call/put 147 9-12/04 82-4/02

McClel Osc.(+75/-100) 24 91-5/04 (81)-5/04
McClelSum.(+750/-1000) 835 1568-6/03 (726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 52.2 62.9-12/04 35-6/06
Bear:43.2/16.1--5yrs 30.4 38.2-3/03 16-6/03

AAII-Bull/Bear 49/37.8 n/a n/a
MarketVane Bulls 72 73 24

Barron's Panic/
Euphoric Master Idx -0.67 -0.24 4/06 -0.75 11/05

Bullish%- 71 88 -2/04 46-8/04

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