Monday, June 20, 2011


Several Indicators are intimating to me that we may have reached a temporary shelf off the S&P 1260 200MA (11,800 on the DJIA). With a choppy week like a puppy shaking a rag doll every day, the McClellan Summation fell through the zero line for the first time in years; the Oscillator hit -63 the week before and is still negative; what also stood out is the CBOE Equity put/call ratio at 93! Bearish ON the market but Bullish FOR it. The AAII Bull/Bear ratio is still inverted, although the Inv.Intell. is not - thanks to a reader I have found a website that carries the I.I.

Finally, big money is coming out of both MMFs and Equity funds on a weekly basis. And although the legal Insider Selling is well of the record of 235:1 recently, it is high at 62:1. For some unknown reason the Technology selling of key officers is HUGE - over $700M for the second week in a row - I know college is expensive, but... Shortly behind is Consumer Services, over $400M. For years, total sales of all the 10 sectors rarely exceeded $700M.
EVERYONE is forecasting an UP yearend, even the good projectors - due to corporate earnings and values; still we are in the JASON semi-annual cycle (June,August,Sept.,Oct.,Nov.). In my mind, the DITM (deep-in-the-money) strategy that I have been successfully testing for over 2 years, is the optimal strategy for this time of the investment cycle:  a Wyckoff selloff, entering a Trading Range where stock prices are lower, dividend %s are higher, and option Volatility is also raised with the selloff - see for recent and historic trading results.

MktSentiment Last WeekPrev. Week 5 Yr HI 5 Yr LOW
S&P 500:127112701561683
CBOE Eq. put/call: 938696-10/0846-1/03
McClellan Osc:(31)(68)108(123)
McClellan Sum:(41)1811568(1514)
           Newsletter Surveys

AAII Bull:
AAII Bear:
US Equity-1 week lagn/a(5.5B)
Money Market Flows(34.4B)15.9B

Baltic Dry Index:1423141811700663
Bullish %:
Insider Corporate Sellers:62:148:1235:12.4:1

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

Subscribe in a reader


No comments:

Post a Comment