Monday, August 30, 2010


In the forthcoming TSAA Review there is an article by GGU Adjunct Prof. Nolan Olhausen which reopened my eyes to a tight inverse correlation between stocks and bonds, primarily Treasuries. Since 2007 there has been a mirror image of these, as shown by comparing the TLT to the SPY on a daily basis - almost as though it were a zero sum game.

Another tight correlation, also coincident, is one I've espied for years in the IBD (Investors' Daily), on the chart page, between the DJIA and put/call trading Volume below it - also inverse.

Although coincident may be too late to act, being in the neighborhood can be an eventual and cautionary alert.

Last week's drowsy mean-seeking numbers gave little indications, save for the AAII Bull/Bear readings - a very reliable one: they jumped from 30/42 to 20/49, which is cause for an imminent rally, possibly after Labor Day - a usually bullish time, before the Sept./Oct. onslaught.

MktSentiment Last WeekPrev. Week 5 Yr HI 5 Yr LOW
S&P 500:106410711561683
CBOE Eq. put/call: 706696-10/0846-1/03
McClellan Osc:-15-34108-123
McClellan Sum:3716071568-1514
Newsletter Surveys

AAII Bull:
AAII Bear:
Nova/Ursa Mutual Funds:n/an/a2.20.56
US Equity-1 week lagn/a(2.7B)

Money Market Flows3.7B4.1B

ETF equity:Monthly TotalsApr.831BMar.805Bn/a
Baltic Dry Index:2703275611700663
Bullish %:
Insider Corporate Sellers:18:114:1108:12.4:1

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