Monday, January 17, 2011


(This has been reposted to correct some formatting problems which caused some of the figures in the table to get chopped off.)

Much has been said lately about the possible toppiness of the recent market runup, including some great wisdom this past weekend from Martin Pring and Associates at the TSAA monthly meeting - many longer term cycle charts and statistics. I strongly advise the reader to go to the website for much of this information, under 2 2011 predictions - free and easily accessible.

Many Sentiment and Breadth extremes have been presenting themselves recently - so much so that I've put together a matrix of the most egregious, which will be shown and explained below.

I'm also giving several presentations in February on the decade-long, year-ending wrapup I exhibited last week, but also more fully explaining these extremes, in February at the GGU Library Learning program Feb.23, the AAII in the Orinda Library, the TSAA monthly meeting, and possibly other venues.

As striking as some of these numbers are, they often need explaining and put into context. Like most wise analysts, I hesitate to call market turns, rather displaying caution lights to hold off buying and look to hedging in apprehension of technical bearish signals.  Of course, these talks will also include my recent variation of the DITM covered call strategy that is so timely and optimally defensive for this Lost Decade ahead.

Here are the two grids:

S&P500April 23,20101217Jan.14,20111293new recent high
July 2,20101022????????since Sept.15,2008

CBOE Eq. put/callApril 16,201042Jan.14,2011477-yr.Low: 42
VIX IndexApril 23,201016.6Jan.14,201115.57-yr.Low: 8.8
NYSE Hi/Lo"950/18Jan.7,2011554/20
McClellan Summ."1241Jan.14,2011625
"May 7,201057
CEO Insider SalesApril 23,2010.91:1Jan.7,2011.30:1
Bullish percent"87Jan.14,201187new recent high:88
Mutual Fund
Equity InflowsApril 23,2010EndedDec.23,2010Resumed
NYSE Margin Debt"$262BDec.23,2010$274Bnew recent high:$381B(July/07)

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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