THE WISDOM OF CROWDS:

As I looked back to a book review I did over a year ago on Surowiecki's best-seller I was amazed at the similar concepts to the one I just did on The Black Swan, about crowds such as the Millionair "Lifeline" and the Iowa Election Market, are more accurate than experts. Ironically, this seems diametrically opposite to Contrary Opinion of Mackay, Humphrey Neil, et.al., but somehow they coexist effectively.
I mention this because a new Indicator has come up on the radar - from www.intrade.com, one that predicts the odds of a Recession, which contrarily predicts the stock market quite effectively. With a high of 59% (Bullish for stocks) and a low of 31%, we are at 47%.
Extremes from last week include several signals nearing their 5-year highs (or lows) - Public to Specialist shorting at 14 (vs. 18 high); the UBS Investor Optimism breached its low at 44, down from 70 the prior week; the AAII Bears reached 56, with the I.I. (Invest.Intell.) at 29. And the Bullish % was up 10 points, a Buy signal off of a reversal low of 37.
Short term negatives for stocks include a +40 on the McClellan Oscillator, very weak NH/NLs, and a weakening of the CBOE put/call and VIX ratios.
Please see below:
Mktsentiment. 11/30/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13371……….12980………..14093..............7286
Nasdaq………. 2660…………2596…………2810.............1114
S&P500…….. 1561…………1440…………1561………..776
CBOE Eq. put/call …60……………73……………91…..........46-1/03

VIX ………. 22.9………….25.6…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 47……………46 ……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………40…………..-28……………91-5/04.........(81)-5/04
McClelSum………-644……………-663…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…47.3………...47.9………..62.9-12/04......35-6/06
Bear:………… 29………….26.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……28.6/56.1…….25.6/52.7……..n/a n/a
MarketVane Bulls…52…………….54…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.11……….8.42….……8.95………. 4.0
Public/NYSE Spec.-…14.2………..11.96…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………48.3/27.6……57.1/28.6
Bullish%- ………47B…………….37……….…88 -2/04...... 36
*Insider corporate sellers.9:1…………8:1
Sectors: Most Buyers: Finance, Consumer Services
Most Sellers: Tech , Healthcare

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance

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THE WISDOM OF CROWDS: