Monday, January 10, 2011


Fresh off their market call a year ago that the summer would see a 16% correction (during an ebullient market time), and we saw the May Flash Crash fall to a 16% correction - Martin Pring and Joe Turner return this Saturday to GGU for a monthly TSAA meeting (only $10 for members), at 8:30 in the a.m.

Fortunately, option expiration and the SFOG meetup is the following Saturday (day after the 3rd Friday of the month), so no conflict there.
This new year started with some cautious action, both in Price and Sentiment: Bullish % is 1 point off a record high at 87; AAII Bulls and Bears are complacent at 55% and 18%. Mutual Fund flows turned to inflows for  the second week in a row, after a multi-month hiatus of selling.

Although Advance/Declines were about even, New Highs to Lows were huge in both the NYSE and Nasdaq. Looking ahead to the January Barometer, it might be wise to hedge after the large rally of 2010, although pre-election years are usually very good overall - better than the other 3 combined in the 4 year cycle.

Here are the numbers: 

MktSentiment Last WeekPrev. Week 5 Yr HI 5 Yr LOW
S&P 500:127112571561683
CBOE Eq. put/call: 465896-10/0846-1/03
McClellan Osc:(7)14108(123)
McClellan Sum:5975381568(1514)
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AAII Bull:
AAII Bear:
US Equity-1 week lagn/a.5B
Money Market Flows(12.1B)22.4B

Baltic Dry Index:1544199911700663
Bullish %:
Insider Corporate Sellers:30:114:1108:12.4:1

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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