Monday, April 19, 2010


One of the surest, albeit infrequent, Sentiment Indicators predicting a top in the market (at least short term) is the complacent Bullishness of a magazine cover, usually Businessweek, per Paul Macrae Montgomery. This time it was Newsweek that shouted it out. Too soon to tell, as Monday's price action seems to digest Friday's selloff from Goldman/option expiry causes.

In heuristic fashion, every analysts is calling for at least a 10% run up in the next few months - even the credible ones. Short term, however, breadth and Sentiment are calling for a respite in this Too-Strong-To Fail market.

The outstanding Indicator is the CEO Insider selling ratio, at 91:1 last week, almost at its record high of last year. This small sampling has a 100% success rate in calling for at least a brief Trading Range, if not a downturn. Bullish % is 1 point away from its high, and the Inv.Intell. Bulls broke 50, at 51.1%, with Bears remaining under 20%.

Money flew out of MMFs at a $50B rate, and Volume was high last week - although the Wednesday up thrust outgained Friday's selloff. New highs ran up to 950 (vs. 18 NLs).

Here are the numbers:

MktSentiment Last WeekPrev. Week 5 Yr HI 5 Yr LOW
S&P 500:119211941561683
CBOE Eq. put/call: 424896-10/0846-1/03
McClellan Osc:-293108-100
McClellan Sum:124112411568-1514
           Newsletter Surveys

AAII Bull:
AAII Bear:
Nova/Ursa Mutual Funds:0.860.942.20.56
US Equity-1 week lagn/a2B
Money Market Flows-51B-18B

ETF equity:Monthly TotalsFeb.750BJan.731B

Baltic Dry Index:3009292211700663
Bullish %:
Insider Corporate Sellers:91:145:1108:12.4:1

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: 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 Zero (IN)Tolerance

Subscribe in a reader


No comments:

Post a Comment