Monday, February 17, 2014

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.

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