Monday, October 28, 2013


As the cumulus clouds accumulate for the winter, so do the worry clouds of Sentiment gather!
The excellent commentary from Barron's and elsewhere combine with the Sentiment Indicators to cause concern about the future:
Margin Debt, which is stated monthly, is at record high, as traders use low interest rates to escape zirp (zero rates); Barron's Big Money poll of their expert money managers shows only 8% are Bearish, as Insider Selling stays at high levels with key employes/officers sell their company stock.
It has been over 500 days since the market has had a meaningful correction - not the longest, as stretches of twice and thrice that have occurred recently - ending in catastrophes of 2000 and 2008.

Money is racing into tech stocks like 1999 - PCLN, GOOG, NFLX, etc., as well as into unproven IPOs. Research charts I've saved show that the 1% of the rich versus everyone else is the highest since 1929; likewise, national debt to GDP is worse than 1929. With the Boomers retiring for the next two decades and the U.S. birthrate (as well as net immigration) declining, GDP looks to worsen to 2% or below, per national studies. Unemployment remains high, especially among the young, who are counted on to replenish Social Security and other entitlements (Obamacare), along with immigrants who are also low-earners.

Finally, my cycle work shows the 4-year President cycle tends consistently to sell off the second year of the election cycle (2014) as it has since WWII.

Here are the numbers: 

10/25/2013 10/18/2013
Indices: DJIA  15570 15400

NAZ  3943 3914

SPX  1759 1744
WklyVolume (Bshs). 9.6/3.5 8.8/3.7
Specul.Ratio hi=bullish 2.74 2.38
Sentiment: put/call-CBOE  58 54
VIX>50-alltmlow=8.8 13.1 13
Advance/Dec-NYSE.. 2047/1145 2539/642
Weekly Net:
902 1897
     Cumulative: 154367 153465
Weekly  NYSE hi/low 688/40 581/125
New Hi's/Low's Nasdaq h/l 681/64 576/59
McClellan  Oscillator 46 62
McClellanSum .+750/-1000 513 257
Newsletter Inv.Intel -Bull:tues 49.5 42.3
Surveys Bear:-5yrs 18.5 21.6

AAII  -Bull :wed. *49.2 46.3

Bear  **17.6 24.9
COT:SPX w/w large/small (net)k 8/15 gov't
COT:gold  comm.hedg long-short.000 (78K) shutdown
CEOinsider selling 41:1 38:1
3-box rev Bullish%-  81 80
US equity -ICI Fund Flows WeekDelay WeekDelay
MMF flows Change in $B 54B (52B)
MargDebt- top (300M) monthly  *10 mo.hi
ETF:mthlyEqty/ Int'l/Bond-$B **21 mo.low
2-yr Tsy Yield: Inflation 0.31% 0.32%

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