Monday, September 24, 2012


Despite the oft-publicized warning that September is the cruelest month for stocks, the Election Year projections from Ned Davis Research that I've been writing about here and the Examiner column: 

according to it, however, next week is the critical market juncture. Of the 28 EYs from 1900, if the Incumbent is to win, or the summation of all EYs (including termed out), the market will keep rising, with bumps, of course. The U.S. fiscal year (not cliff) ends this month, the election, Euro, etc. can produce volatility.

Sentiment indicators are issuing an overbought warning for now, hopefully just a sideways move. Facts such as the End of Quarter rebalancing by institutions, put/call ratio, bullish per cent, even newsletter surveys show caution.  Last week the CEO Insider Selling was 42:1 after hitting a high of 78 :1 the week before. Last week selling brought the McClellan Oscillator near zero, but the cum. Summation is way high at 888. NYSE new lows to highs were almost 20:1 again. 

Awhile back Arch Crawford, who trained at Merrill Lynch under Bob Farrell, but relies a lot on alignment of stars, points out the current Vernal Equinox as a climactic moment for stocks.

Here are the results from last week:


9/21/2012 9/14/2012
Indices: DJIA  13579 13593
  NAZ  3179 3183

SPX  1460 1465
WklyVolume (Bshs).
NASD/NYSE   9.2/4.4 8.6/3.6
Specul.Ratio hi=bullish 2.09 2.39

Sentiment: put/call-CBOE  64 56
VIX>50-alltmlow=8.8 13.98 14.5
Advance/Dec-NYSE.. 1371/1768 2317/837
Weekly Net:
-397 1480
     Cumulative: 143061 143458
Weekly  NYSE hi/low 505/32 722/36
New Hi's/Low's Nasdaq h/l 332/74 403/81
McClellan  Oscillator 4 63
McClellan Sum .+750/-1000 888 820
Newsletter Inv.Intel -Bull:tues 54.2 51.1
Surveys Bear:-5yrs 24.5 25.5

AAII  -Bull :wed. 37.5 36.5

Bear  33.8 33
COT:Change w/w large/small (net)k 9/22. 5/5.
CEOinsider selling 42:1 78:1
3-box rev Bullish%-  79 79
US equity -ICI Fund Flows 1 wk lag (2.8B)
MMF flows Change in $B (10.3B) 8B
MargDebt- top (300M) monthly 
ETF:Eqty/Int'l/Bond  million$$ .
2-yr Tsy Yield: Inflation 0.27% 0.26%

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