HAIR OF THE DOG:

As a former bar owner/bartender I can vouch for the "hair of the dog" tactic for alleviating a hangover - but it should not be used WHEN THE PARTY IS STILL DRUNK! Which is what the Gov't Stimulus plan does, instead of suffering the pain short term. Instead of the taxpayer (mis)handling the toxic debt, how about letting the Private sector - investors, SWFs, etc. participate in a Dutch auction and let the market set the price?
With the worst ever January market action behind us, what does the future hold? The January barometer only forecasts well in up markets (down markets were split even: 11 up, 11 down in the past 6 decades).
Despite a wild up-down week, the sentiment signals were pretty benign from the previous week. Any predictive bias seems to be to the upside, with both the Inv.Intell. and AAII surveys still inverted with the Bears leading; breadth diverged positively while the averages dropped or stayed even, and Insider selling was quite low.
Previous TSAA guest, local Charles Biderman of Trimtabs.com was profiled by Barron's this week. He is basically negative on the markets, and posits that much of the large ($4T) amount of cash in money market funds is committed to reserves, redemptions, retirement, and even current living expenses.
Here are the numbers:
MktSentiment. 1/30/2009 Prev. Week.....5Yr.HI......LOW

DJIA ………. 8000……….8077.………..14093............7286
Nasdaq………. 1476……….1477…………2810.............1114
S&P500…….. 825………..831………….1561………..776
CBOE Eq. put/call ……73………..77……..…96-10/08….....46-1/03

VIX ………. 44……….. 47…….…….79..-10/08bull….10.0-7/05 bear

McClellan Osc………-23…………-31……………..108-1/09 bear...(-100)-10/08bull
McClelSum……….…156…………143……..…....1568-6/03.......-1514-10/08
Newsletter Surveys:
Inv.Intel -Bull:…..…34.8…………38.7……….…63 (12/04bear)......22.2-10/08bull
Bear:………… 38.0…………36.7……………..………… 54.4.10/08.......16-6/03
AAII-Bull/Bear ……25.3/47.3……27.2/46.3…....……..n/a n/a
Market Vane - T-Bond..70…………75……………..91
Baltic Dry Index ……1070…………980…………………………………663
Bullish%- …….…51…………..46sell……………….…88 -2/04bear.....2-10/08bull
*Insider corporate sellers. 11:1……13:1…. ………..97………….2.4:1 (11/08)
Mutual Fund Inflows … (.8B)………. .4B
ETF InflowsL……… .5B………….(5.1B)……
Money Market Inflows: 5B…………(19B… ………144B

www.mktsentiment.blogspot.com is a free weekly display of important contrary opinion statistics, with the disclosure that eventual fees may be paid to the author from readers clicking on the website and/or the small ad at the top of the column.

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

Subscribe in a reader

HAIR OF THE DOG: