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
Subscribe in a reader
No comments:
Post a Comment