Monday, October 24, 2011


While the Fed does the Twist with Zero interest rates impoverishing prudent investors while banks prosper, Occupy Wall St. shouts displeasure (37% of those polled agree with them). Uncle Ben predicted that the QEs would raise the stock market, but failed to mention the prices of oil, food, etc. that the average citizen had to buy, while receiving negative interest after Inflation (2 1/2%), taxes (going up soon), and a weakening $.
The year-end rally has begun, according to various cycles, but could become sticky around the current level (Jan., Mar., and Jun. lows/Support). 
Last week imitated the new PBS TV program Red/Green on my charts - a rarity in Volatility. Disappointing was that the Nasdaq (which indicates Bullish speculation) did not rise along with the DJ and SPX. Its New Highs/Lows also remain negative as well.
Although the McClellan Summation made its first positive reading since last July ( positive breakthrough), the Oscillator remains overbought at +69. Another interesting number is the Insider Selling of Key Officers - it has jumped from a record low of 3:1, two weeks ago, through 30:1 to 60:1. Early Christmas shopping?
Readers who follow my 3-year testing of my Optimal DITM covered call strategy on are advised that after 25 years of managing substantial family money (3 with DITM), I have decided to take on a few clients (under the SEC minimum), since although DITM seems like a simple strategy, people have asked me at various lectures and booksignings to manage it for them. More details are available at the blog or if interested.
Here are the numbers from last week:

MktSentiment Last WeekPrev. Week 5 Yr HI 5 Yr LOW
S&P 500:123812241561683
CBOE Eq. put/call: 646696-10/0846-1/03
McClellan Osc:6980108(123)
McClellan Sum:173(74)1568(1514)
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AAII Bull:
AAII Bear:
US Equity-1 week lagn/a(5.9B)
Money Market Flows(2B)5B

Baltic Dry Index:2161215511700663
Bullish %:
Insider Corporate Sellers:60:130:1235:12.4:1

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

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