Monday, April 9, 2012


Sentiment Indicators warned of toppiness in the markets a few weeks ago with Orange Alert, and Tom DeMark of Bloomie nailed it on March 26. Based on several reasons, my guess of 2012 was a Bar Bell approach, with the 1st and 4th Q rising, and the middle sloppy. 6-month, 4-year Presidential and Decennial cycles are the main deciders. So good so far.

Buy signals are not seen nor expected in the near future - several Indicators are still at Bearish (for the market) levels. the Inv.Intell. Bulls hit 52.7%, a recent high; NASD Volume increased vs. NYSE (speculative); CEO Insider Selling was cut in half, but still high at 44:1. The SPX was stretched above its 50-day MA.

For my DITM (deep-in-the-money) covered call strategy:
it has been put on hold while awaiting a bottom entry level. While it is not the best short term strategy for the recent Bull run, it has increased the safety cushion on existing holdings.

Here are the numbers:

4/5/2012 3/30/2012
Indices: DJIA  13060 13212
  NAZ  3080 3091

SPX  1398 1408
NASD/NYSE WklyVolume (Bshs). 6.9/3.1 8.5/4.1
nasd/nyse Specul.Ratio hi=bullish 2.23 2.07
Sentiment: put/call-CBOE  60 66
Barron's VIX>50-alltmlow=8.8 16.7 15.5

Advance/Dec-NYSE.. 1139/1999 1723/1443

Weekly Net: -860 280

     Cumulative: 132845 133705
Weekly  NYSE hi/low 246/68 320/61
New Hi's/Low's Nasdaq h/l 197/107 351/57
McClellan  Oscillator -25 40
McClellan Sum .+750/-1000 540 664
Newsletter Inv.Intel -Bull:tues 52.7 50.1
Surveys Bear:-5yrs 21.5 22.6

AAII  -Bull :wed. 38.2 42.5

Bear  27.8 25.5
COT:Change w/w large/small (net)k .6/2 5/(2)
CEOinsider selling 44:1 89:1
BalticDryIndex GlobalEcon 931 930
3-box rev Bullish%- 
US equity -ICI Fund Flows 1 wk lag (3.5B)
MMF flows Change in $B (15.2B) (17.2B)
MargDebt- top (300M) monthly FEB..
ETF:Eqty/Int'l/Bond  million$$ FEB..
2-yr Tsy Yield: Inflation 0.32% 0.34%
Euro futures 1 yr.offset-CommHedg 5.2 5

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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