Monday, February 24, 2014

FLOOD WARNINGS!

As the rest of the world revolts, money seems to be flowing into  all U.S. assets today, from the stock markets, to gold and oil. Many Sentiment Indicators are at high levels, but off their prior recent extremes. A few notables, as defined in an (Older Post below) earlier column include Insider Selling, which was quite high at year end - expectedly- but resumed this week to 130 to 1 over Buying, with Board/Officers accounting for 200 sales (100 after exercising options), and about 25 being the 10% stockholders (Carl Icahn, et.al.).
Huge $$ came from MMFs (money markets) at $50B; charts show that the three previous highs in withdrawals were at early stages of a Bull run, in June 21, Oct. 18, and Dec.20 of 2013 - a good sign, short term. In my Examiner.com column I shall enumerate some disturbing negative technical signs:
 http://www.examiner.com/stock-market-in-san-francisco/brent-leonard .

Other extremes include Gold commercial sellers, despite today's and the recent rallies, at 97k.

Here are the numbers:

Date> 2/21/2014 2/14/2014
Indices: DJIA  16103 16154
  NAZ  4263 4244
SPX  1836 1838
WklyVolume (Bshs). naz/ny 7.9/2.9 9.9/3.3
Specul.Ratio hi=bullish 2.72 .3.0
Sentiment: put/call-CBOE  57 60
VIX>50-alltmlow=8.8 14.7 13.6
Advance/Dec-NYSE.. 1948/1247 2489/722
Weekly Net: 701 1767
     Cumulative: 156516nh 155815nh
Weekly  NYSE hi/low 353/52 272/67
New Hi's/Low's Nasdaq h/l 368/47 291/54
McClellan  Oscillator 44 63
McClellanSum .+750/-1000 727 526
Newsletter Inv.Intel -Bull:tues 46.5 41.8
Surveys Bear:-5yrs 17.2 17.4
AAII  -Bull :wed. 42.2 40.1
Bear  22.8 27.3
COT:SPX w/w large/small (net)k 5k/(25k) 4/(19)
COT:gold  comm.hedg long-short.000 (97k) (72k)
CEOinsider selling 130:1 32:1
off.&bd b/s.vs. 10% holder b/s 200:25 150:40
3-box rev Bullish%-  70 67
US equity -ICI Fund Flows WeekDelay 4.2B
MMF flows Change in $B (49B) 8B
MargDebt- top (300M) monthly  445B DEC.
ETF:mthlyEqty/ Int'l/Bond-$B 1028/399/246 DEC.
2-yr Tsy Yield: Inflation 0.32% 0.33%

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance


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Monday, February 17, 2014

Glossary-Part II

In case you missed it, the previous blog reviewed each of the following Sentiment Indicators, for new readers and old (please see "Older Posts").

Last week indicated at least a temporary reprieve from the imminent Correction everyone was expecting, coming back strong with bargain hunters and Yellen supporters.Reversals and regressions to the means included put/call ratio, Volume ratio (near record high); VIX, cumulative (proprietary) to new highs; especially the AAII Bull to Bear ratio flipflop.

However, Insider selling and commercial gold selling remains strong,

Here are the numbers:

Date> 2/14/2014 2/7/2014
Indices: DJIA  16154 15794
NAZ  4244 4125
SPX  1838 1797
WklyVolume (Bshs). naz/ny 9.9/3.3 10.8/4.0
Specul.Ratio hi=bullish .3.0 2.7
Sentiment: put/call-CBOE  60 62
VIX>50-alltmlow=8.8 13.6 15.3
Advance/Dec-NYSE.. 2489/722 1721/1473
Weekly Net: 1767 248
     Cumulative: 155815nh 154048
Weekly  NYSE hi/low 272/67 132/196
New Hi's/Low's Nasdaq h/l 291/54 148/159
McClellan  Oscillator 63 14
McClellanSum .+750/-1000 526 300
Newsletter Inv.Intel -Bull:tues 41.8 45.9
Surveys Bear:-5yrs 17.4 17.4
AAII  -Bull :wed. 40.1 27.9
Bear  27.3 36.4
COT:SPX w/w large/small (net)k 4/(19) (3k)/(2k)
COT:gold  comm.hedg long-short.000 (72k) (97k)
CEOinsider selling 32:1 24:1
off.&bd b/s.vs. 10% holder b/s 150:40 160:25
3-box rev Bullish%-  67 63
US equity -ICI Fund Flows WeekDelay (1.6B)
MMF flows Change in $B 8B (1.0B
MargDebt- top (300M) monthly  445B
ETF:mthlyEqty/ Int'l/Bond-$B DEC.
2-yr Tsy Yield: Inflation 0.33% 0.30%

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance


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Glossary of mktsentiment Indicators

For any new readers of this blog ( and a review for current readers) it seems like a good time to review the definitions of the Sentiment Indicators which I have settled on after 20 years of following them, pursuant to getting my CMT ( Chartered Market Technician) designation from the MTA. The ultimate question is how useful, short and long term, are these when the Federal Reserve seems to trump Contrary Opinion with its own.
(Recent record highs/lows follow in parents):

Wkly Volume: NASD as contrasted to NYSE Blue Chips indicates a speculative preference, if the ratio is high (3.17)

VIX: usually coincident, but indicates eventual trend change at extremes (90, 8.8)

Advance/Decline-NYSE: A breadth Indicator, market strength, but at extremes could signal reversal; Cumulative is multi-year net, which is now at all time high (155,8150

New Hi's/Lo's- also breadth, both NYSE and NASDAQ. Just reversed to positive w/w.

McClellan Oscillator and Summation - based on 5 and 10% formula of A/D (above). Bounds of +50 and -50 can indicate short term reversals. (current +63)

Newsletter Surveys:
Inv.Intell. - Wire house newsletters opinions - analysts and strategists. (62)
AAII - Individual Investors Bull/Bear ratio -just flipped back to positive (more complacent) - (Bulls also 63; Bears 70).

COT - Commitment of futures traders - smart versus dumb money.
            SPX futures:large investors v. small.
            Gold- commercial hedgers ( recently negative selling, despite rally).

Insider Selling - Jury still out on this one, but recent breakdown of Officers and Board versus 10% stock holders (less informed) may foretell longer term direction.

Bullish % is a point & figure chart of stocks on BUY signals (overbought)- (88%)

US Equity mutual funds (MUF) flows and MMF (money markets) in B$.


Finally, ETF flows: US Equity ETFs, Int'l, and Bond fund flows monthly, plus Margin Debt which is currently at record high (toppy) numbers. 2-year TSY could indicate Inflation eventually.

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance


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Monday, February 10, 2014

BACK TO NORMAL

Stocks seem to be on track with Janet Yellen to be more accommodative even than Ben. Only extremes were the dramatic reversal of the AAII Bull/Bear ratio over three weeks and the New His/Los going negative. Also, gold commercial traders actually increased selling, although an extreme oversold condition exists.The whole yield curve of Treasurys is also defying popular consensus.
Here are the numbers:

Date> 2/7/2014 1/31/2014
Indices: DJIA  15794 15698
NAZ  4125 4103
SPX  1797 1782
WklyVolume (Bshs). naz/ny 10.8/4.0 10.9/3.7
Specul.Ratio hi=bullish 2.7 2.95
Sentiment: put/call-CBOE  62 57
VIX>50-alltmlow=8.8 15.3 18.4
Advance/Dec-NYSE.. 1721/1473 1451/1756
Weekly Net: 248 -305
     Cumulative: 154048 153800
Weekly  NYSE hi/low 132/196 138/171
New Hi's/Low's Nasdaq h/l 148/159 214/102
McClellan  Oscillator 14 -31
McClellanSum .+750/-1000 300 443
Newsletter Inv.Intel -Bull:tues 45.9 53.1
Surveys Bear:-5yrs 17.4 15.3
AAII  -Bull :wed. 27.9 32.2
Bear  36.4 32.8
COT:SPX w/w large/small (net)k (3k)/(2k) 7/8k
COT:gold  comm.hedg long-short.000 (97k) (65K)
CEOinsider selling 24:1 31:1
off.&bd b/s.vs. 10% holder b/s 160:25 215:40
3-box rev Bullish%-  63 70
US equity -ICI Fund Flows WeekDelay 1.9B
MMF flows Change in $B (1.0B (1.8B)
MargDebt- top (300M) monthly  445B
ETF:mthlyEqty/ Int'l/Bond-$B DEC. 1028/399/246
2-yr Tsy Yield: Inflation 0.30% 0.34%

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance


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Monday, February 3, 2014

RUN FOR COVER!

Welcome to your new job, Ms. Yellen! Hardly the best way to start your first day on the job, with Mr. Market dropping like a rock. With all hubris aside, it is comforting to know that the investment strategy(s) I have been extolling for the past 5 years - Deep-In-The-Money COVERed Calls, and more recently, LEAP Strangles (OTM puts and calls) are doing splendidly in this environment.
With the DJIA down over 1200 points so far in 2014 (SPX down over 100), a report card of my 27 fully invested positions show 8 DITM positions, only one Under Water; of the 19 Leaps, 7 are still in the call-away area (max profit), 9 in the sweet spot, between the put and call strangle, and only 3 precious metal stocks Under Water, with 2016 as the expiry date. Having missed the unexpected 30% runup in stocks last year, it did provide a cushion or hedge against the inevitable.

Sentiment extremes include the record margin interest, updated last week to $445B, huge Insider selling (see below) 215 sales, with only 40 of the from ESOP exercises by officers and board members; 40 is also the number of sales by 10% holders. Coincidentally, the per cent of AAII Bears surpassed Bulls last week (a/o Wednesday), historically more reliable than the Inv. Intell. Bull/Bear survey.
Also in the monthly update was ETF totals, with Equity up over $1T; Int'l and Bond ETFs were frozen.
For more commentary, please visit: http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Here are the numbers:

  
Date> 1/31/2014 1/24/2014
Indices: DJIA  15698 15879
  NAZ  4103 4128
SPX  1782 1790
WklyVolume (Bshs). naz/ny 10.9/3.7 8.6/3.1
Specul.Ratio hi=bullish 2.95 2.77
Sentiment: put/call-CBOE  57 61
VIX>50-alltmlow=8.8 18.4 18.14
Advance/Dec-NYSE.. 1451/1756 1088/2130
Weekly Net: -305 -1042
     Cumulative: 153800 154105
Weekly  NYSE hi/low 138/171 366/91
New Hi's/Low's Nasdaq h/l 214/102 412/59
McClellan  Oscillator -31 -31
McClellanSum .+750/-1000 443 622
Newsletter Inv.Intel -Bull:tues 53.1 57.6
Surveys Bear:-5yrs 15.3 15.1
AAII  -Bull :wed. 32.2 38.1
Bear  32.8 23.8
COT:SPX w/w large/small (net)k 7/8k 7/21k
COT:gold  comm.hedg long-short.000 (65K) (46k)
CEOinsider selling 31:1 70:1
off.&bd b/s.vs. 10% holder b/s 215:40 200:70
3-box rev Bullish%-  70 79
US equity -ICI Fund Flows WeekDelay WeekDelay
MMF flows Change in $B (1.8B) 6.4B
MargDebt- top (300M) monthly  445B
ETF:mthlyEqty/ Int'l/Bond-$B 1028/399/246
2-yr Tsy Yield: Inflation 0.34% 0.35%

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance


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