Monday, July 22, 2013


One of the great Contrarian signals is that when everyone is looking one way, the other way happens. So many analysts and strategists are so Bullish, due to the Fed's manipulation and the U.S. being the best house in a bad neighborhood.To balance this out, here are a couple of Bearish views:

Garrett Jones, who studied technicals under Robert Farrell at Merrill Lynch, gave a talk recently at San Francisco's Bloomberg office,  predicting a Black Swan event. Based on his circa 40-year cycle work ( charts show selloffs from 1811, 1851, 1891 1930, and 1974 ). Garrett expects a large decline sometime in July - with today being the 22nd.

Since 1900, there have been no less than one and no more than two Bear markets per decade, including the last decade (2001, 2008). Four years into the current one, we have barely had more than a 15% correction - 2010 and 2011 - in the SPX. Raymond James' Jeff Saut states that although the recent breadth ( Advances vs. Declines) showed a 17% decline, the market only just corrected 7% - meaning we have more to go. Europeans Marc Faber and Felix Zulauf see 20-30% declines in U.S markets.

Most Sentiment Indicators are coming of extremes: MMF Inflows increased almost $13B last week; while Equity flows finally gained slightly, as did ETF Inflows. Bullish %, a toppy indicator, hit 81 and the Investors' Intelligence Bull/Bear ratio ran to 52%, with Bears under 20%.

Here are the numbers:

7/19/2013 7/12/2013
Indices: DJIA  15543 15464
  NAZ  3587 3600

SPX  1692 1680
WklyVolume (Bshs).

NASD/NYSE   8.0/3.4 7.9/3.7
Specul.Ratio hi=bullish 2.35 2.14

Sentiment: put/call-CBOE  56 61
VIX>50-alltmlow=8.8 12.5 13.8
Advance/Dec-NYSE.. 2029/1141 2523/645
Weekly Net:
888 1878
     Cumulative: 152600 151712
Weekly  NYSE hi/low 586/61 551/119
New Hi's/Low's Nasdaq h/l 688/47 728/42
McClellan  Oscillator 46 59
McClellanSum .+750/-1000 429 182
Newsletter Inv.Intel -Bull:tues 52.1 46.9
Surveys Bear:-5yrs 19.8 22.9

AAII  -Bull :wed. 47.7 48.9

Bear  21.3 18.3
COT:Change w/w large/small (net)k 12/4 13/3
CEOinsider selling 76:1 106:1
3-box rev Bullish%-  81 79
US equity -ICI Fund Flows 1weeklag 4.5B
MMF flows Change in $B 8.5B 12.8B
MargDebt- top (300M) monthly 

ETF:Eqty/ Int'l/Bond

Assets in  Billion$$ .

2-yr Tsy Yield: Inflation 0.30% 0.34%

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