Poly-Cycles:

In last week's Barron's magazine Michael Santoli's column showed a chart by Ned Davis Research, of a nesting of several cycles - I've been citing these for months now and the visualization matches the historical prediction. Years ago I did a white paper on cycles going back to 1790 (thanks to Jake Bernstein's Cycle book), which showed the 18-year double cycle Martin Pring has been warning about; with the zero year also being the worst year in the Decennial cycle over 12 decades; the 4 year cycle almost perfect since WWII, the May to November period - all show a dismal few months to come (after a brief oversold summer rally).

Couple that with a failed Santa Claus rally, a lousy January barometer, and a global economy, and my DITM (deep-in-the-money) investment strategy looks pretty good (see www.brentleonard.com for more).

The sentiment indicators below do not show too much in the way of extremes, but the CEO insider selling continues to increase, while the Baltic Dry Index (proxy for the global economy) decreases weekly; money market funds gave up the most since April, the apogee of the sugar rally. And the AAII Bull/Bear ratio did a huge about face from the prior week, indicating complacency.

While breadth is stronger recently, the McClellan Oscillator is flashing a short term warning.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10450	10211	14093	6626
Nasdaq:	2309	2243	2805	1114
S&P 500:	1117	1091	1561	683
CBOE Eq. put/call:	63	68	96-10/08	46-1/03
VIX:	24	30.6	90	8.8
McClellan Osc:	50	20	108	-123
McClellan Sum:	-48	-383	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	37	38.5	63	22.21
InvestorsIntel.Bear:	32.6	31.9	54.4	16
AAII Bull:	42.5	34.5	n/a	n/a
AAII Bear:	30.7	43.1	n/a	n/a
Nova/Ursa Mutual Funds:	1.2	0.85	2.2	0.56
US Equity-1 week lag	n/a	-3.7B
Money Market Flows	-35B	.7B
ETF equity:Monthly Totals	Apr.831B	Mar.805B
Baltic Dry Index:	2694	3423	11700	663
Bullish %:	54buy	41	88	2
Insider Corporate Sellers:	20:1	17:1	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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Poly-Cycles: