Comparisons are often made between an amateur poker player sitting in on the World Series of Poker, and the average investor trying to compete with institutional traders using black boxes, flash trading and dark pools - add to that government intervention just when a trend is recognized; and it often spells disaster these days. Technical tools, including Sentiment, can help, but lately they haven't told much, with the end of the year portfolio-squaring in sight.
The market and breadth continue to act strong, as Trillions of $$ remain in low-returning investments- still, warning signs appear on the horizon: the Bullish % is down 5 points from its high at 72, a SELL signal; the Investors' Intelligence Bears are at a 5-year low of 16.5 (complacent); and this week's Insider Selling jumped to 43 to 1 over Buying - Holiday shopping, no doubt!
Note: Investors who are "FED" up with Bernanke's zero interest rate policy for an extended period, might want to look into a simple, low-risk stock market strategy that has been returning annualized double-digit results so far this year, with an added safety net.
I have been giving talks on this dividend/covered call plan in the Bay Area (a reprise this Saturday at the SF Options group), and would be happy to share the lecture notes and results with anyone by responding to : leonbrnt@aol.com.
For those who have already inquired and do not feel confident about selecting and monitoring these intermediate term positions, I am offering a fee-based service on a quarterly basis, until the training wheels are ready to come off. It includes weekly Buy/Write (as needed) selections, and the monitoring of expired or called-away positions ( also possible downdrafts).
This is based on 25 years of professional and private experience and 5 years teaching a similarly run Cyber-class at Golden Gate Univ. using e-mail communications, with phone calls if urgent action is required.
Here are the Sentiment numbers:
| MktSentiment | Last Week | Prev. Week | 5 Year High | 5 Year Low |
| DJIA: | 10471 | 10388 | 14093 | 6626 |
| Nasdaq: | 2190 | 2194 | 2805 | 1114 |
| S&P 500: | 1106 | 1105 | 1561 | 683 |
| CBOE Eq. put/call: | 62 | 61 | 96-10/08 | 46-1/03 |
| VIX: | 21.6 | 21.3 | 90 | 8.8 |
| McClellan Osc: | 21 | 23 | 108 | -100 |
| McClellan Sum: | 496 | 444 | 1568 | -1514 |
| Newsletter Surveys | ||||
| InvestorsIntel.Bull: | 48.4 | 50.0 | 63 | 22.21 |
| InvestorsIntel.Bear: | 16.5 | 16.7 | 54.4 | 16 |
| AAII Bull: | 42.7 | 41.6 | n/a | n/a |
| AAII Bear: | 35.4 | 33.7 | n/a | n/a |
| Nova/Ursa Mutual Funds: | 0.55 | 0.56 | 2.2 | 0.56 |
| Mutual Fund Flows: | n/a | 7.1B | ||
| Money Market Flows | -.4B | -8.4B | ||
| ETF equity:Monthly Totals | Oct.591B | Sep.$580B | ||
| Baltic Dry Index: | 3579 | 4107 | 11700 | 663 |
| Bullish %: | 72 | 74 | 88 | 2 |
| Insider Corporate Sellers: | 43:1 | 26:1 | 108:1 | 2.4:1 |
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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