Monday, November 22, 2010


GM (Government Motors) may have been the Evil of Two Lessers, and was a partial success, especially to Warren Buffet who praised it and the UAW who benefited more than bond and stock holders. In his classic book - Against The Gods -  the late Peter Bernstein posits that while geniuses were prevalent before the end of the Middle Ages (Euclid, Da Vinci,, neither the Hindus and Arabs, who gave us our numbering system discovered Capitalism, or the use of Risk and Probabilities in society. Thanks to Leonardo Fibonacci (nee Pisano) and later Pascal and Fermat, civilization started using them, with the help of the printing press, resulting in exponential advances. The main reason  was that earlier societies were comfortable with the status quo, and reliance on their gods for Fate and Risk - much like cradle to grave governing has a tendency to do these days.

Like all things organic (humans, vegetation, corporations, governments, and societies) unless modified, the growth cycle and aging eventually result in destruction - death, bankruptcies, revolutions.

Although last week's volatility did not show up in the final unchanged market levels, there was not much change in the Sentiment Indicators. Standouts include AAII Bulls dropping from a high 57.6% to only 40 - the Investors' Intelligence Bulls, however, increased from 48 to 56, while their Bears dropped to a low 20%; Insider Selling dropped to still a high 34:1.

Here are the numbers:

MktSentiment Last WeekPrev. Week 5 Yr HI 5 Yr LOW
S&P 500:119911991561683
CBOE Eq. put/call: 595796-10/0846-1/03
McClellan Osc:(20)(54)108(123)
McClellan Sum:6088681568(1514)
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AAII Bull:
AAII Bear:
US Equity-1 week lagn/a(.7B)
Money Market Flows(4.1B)2.2B

Baltic Dry Index:21642454011700663
Bullish %:
Insider Corporate Sellers:34:179:1108:12.4:1

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

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