Monday, October 27, 2014

BOO WHO

Not the scariest October in record, in fact one of the most expected corrections in recent years - sans Fed activity. Usually the Hallowe'en Effect creates a buying opportunity for stocks, but not last year, nor 2010.

Sentiment extremes quieted down last week, with the breadth (advance/decline) continuing UP and the Insider selling DOWN. In fact the 10% stockholders are Buying recently. The McClellan Oscillator went to a +68 - way overbought, hence the small selloff at today's open. MMF flows are making as violent swings as the markets.

Here are the numbers:

Date> 10/24/2014 10/17/2014
Indices: DJIA  16805 16380
NAZ  4483 4258
SPX  1964 1886
WklyVolume (Bshs). naz/ny 9.3/3.9 12.7/5.2
Specul.Ratio hi=bullish 2.38 2.44
Sentiment: put/call-CBOE  63 75
VIX>50-alltmlow=8.8 16.1 22
Advance/Dec-NYSE.. 2135/572 2000/1250
Weekly Net: 1563 750
     Cumulative: 161787 160224
Weekly  NYSE hi/low 214/101 89/813
New Hi's/Low's Nasdaq h/l 137/152 81/650
McClellan  Oscillator 68 10
McClellanSum .+750/-1000 -353 -625
Newsletter Inv.Intel -Bull:tues 35.3 37.8
Surveys Bear:-5yrs 18.2 17.3
AAII  -Bull :wed. 49.7 42.7
Bear  22.5 33.7
COT:SPX w/w large/small (net)k (1k)/(7k) 0k/20k
COT:gold  comm.hedg long-short.000 (105k) (75k)
CEOinsider selling 12:1 13:1
off.&bd b/s.vs. 10% holder b/s 210:25 160:20BUY
3-box rev Bullish%-  48 41
US equity -ICI Fund Flows WeekDelay (5.0B)
MMF flows Change in $B 12.9B (22B)
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.39% 0.38%

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, October 20, 2014

ZUGZWANG

In Chess jargon the German word Zugzwang means "Forced Move", wherein the opponent has to make only one choice, and it is usually not a good one! As the investing world moves forward, fewer and fewer choices are available to prudent investors, and economists and Fundamental Analysts seem to be in unanimous agreement (usually a bad contrary sign) that the U.S. stock market will rise in the next three months to 2 years or more.

The Technical picture, based here on Sentiment Indicators is not so one-sided, although there are some eye-popping moves from last week - more explanation at:    http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Exchange Volume was at a 2014 high (Selling Climax?); the CBOE put/call ratio as well. The Commitment of Traders "smart money" - large traders, was dead even (buy/short), while the small ones were net long 20k.Finally, Insider Trading dropped to 13:1 sellers, but the surprise number was the 10% stock holders almost unanimously buying more stock!

Here are the numbers:


Date> 10/17/2014 10/10/2014
Indices: DJIA  16380 16544
NAZ  4258 4276
SPX  1886 1906
WklyVolume (Bshs). naz/ny 12.7/5.2 11.3/4.2
Specul.Ratio hi=bullish 2.44 2.69
Sentiment: put/call-CBOE  75 72
VIX>50-alltmlow=8.8 22 21.2
Advance/Dec-NYSE.. 2000/1250 801/2453
Weekly Net: -750 -1652
     Cumulative: 158724 160251
Weekly  NYSE hi/low 89/813 103/565
New Hi's/Low's Nasdaq h/l 81/650 80/549
McClellan  Oscillator 10 -61
McClellanSum .+750/-1000 -625 -475
Newsletter Inv.Intel -Bull:tues 37.8 45.5
Surveys Bear:-5yrs 17.3 14.1
AAII  -Bull :wed. 42.7 39.9
Bear  33.7 31
COT:SPX w/w large/small (net)k 0k/20k (7k)/24k
COT:gold  comm.hedg long-short.000 (75k) (63k)
CEOinsider selling 13:1 40:1
off.&bd b/s.vs. 10% holder b/s 160:20BUY 175:40
3-box rev Bullish%-  41 61
US equity -ICI Fund Flows WeekDelay (.5B)
MMF flows Change in $B (22B) 17.0B
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.38% 0.43%

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, October 13, 2014

WILD WEEK

I knew if I went on vacation to San Diego for a week the market would go crazy - especially during this critical Sept.-Oct. span. Luckily, even with a few Sentiment and breadth extremes, my current investment strategies - DITM and especially Leaps are not directly affected. I shall be giving a talk on these this Saturday at the SF Option Group monthly meetup at Ft. Mason - 9 a.m. BLDG C (Rm.235) for local readers.

The overdue correction brought a few extreme readings in the last two posts - the previous week's unavailable (n/a) are updated today:
NYSE Volume increased as expected; also the CBOE put/call ratio and VIX did as well. Breadth (advance/declines) were negative for the fourth week - mutual fund outflows reached 6 straight weeks. The McClellan Oscillator was below -50, which again failed to see a buy signal today, and the Summation is at a recent low - hopefully support. Incidentally, Tom McClellan will be presenting at the TSAA annual seminar this month - please see my Examiner.com column if interested in attending:   http://www.examiner.com/stock-market-in-san-francisco/brent-leonard.

Finally, the 2-year Treasury yield dropped dramatically- all numbers are below:

Date> 10/10/2014 10/2/14*
Indices: DJIA  16544 17010
  NAZ  4276 4481
SPX  1906 1968
WklyVolume (Bshs). naz/ny 11.3/4.2 10.0/4.1
Specul.Ratio hi=bullish 2.69 2.44
Sentiment: put/call-CBOE  72 65
VIX>50-alltmlow=8.8 21.2 14.6
Advance/Dec-NYSE.. 801/2453 1235/2012
Weekly Net: -1652 -777
     Cumulative: 160251 161126
Weekly  NYSE hi/low 103/565 92/445
New Hi's/Low's Nasdaq h/l 80/549 105/410
McClellan  Oscillator -61 -53
McClellanSum .+750/-1000 -475 -272
Newsletter Inv.Intel -Bull:tues 45.5 47.5
Surveys Bear:-5yrs 14.1 15.1
AAII  -Bull :wed. 39.9 35.4
Bear  31 30.9
COT:SPX w/w large/small (net)k (7k)/24k n/a
COT:gold  comm.hedg long-short.000 (63k)
CEOinsider selling 40:1 52:1
off.&bd b/s.vs. 10% holder b/s 175:40 175:40
3-box rev Bullish%-  61 65
US equity -ICI Fund Flows WeekDelay (4.1B)
MMF flows Change in $B 17.0B 22.8B
MargDebt- top (300M) monthly  463B
ETF:mthlyEqty/ Int'l/Bond-$B 1141/454/281
2-yr Tsy Yield: Inflation 0.43% 0.57%

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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Friday, October 3, 2014

San Diego

Before I fly out on United's Ebola Gay to San Diego here is the week's Sentiment update a/o Friday midday:
Although the usual signal from the McClellan Oscillator did not work on Monday, it did kick in after the minus 50 (53) signal from Thursday - hence Friday's upsurge. The Bull / Bear surveys remained the same - the I I comes out on Tuesdays and the AAII on Wednesdays. Many n/as from the week in progress; individual insider selling remains strangely constant, with the Sector figures doubling - 25: to 52:1 sellers over buyers.
Finally the August numbers came in for margin debt (actually reported last week) just below record highs at 463B; ETF totals all rose to new highs - equity, Int'l and Bonds - despite Gross's departure.
Here are the numbers:

Date> 10/2/14* 9/26/2014
Indices: DJIA  17010 17113
  NAZ  4481 4512
SPX  1968 1982
WklyVolume (Bshs). naz/ny n/a 9.0/3.5
Specul.Ratio hi=bullish n/a 2.57
Sentiment: put/call-CBOE  69
VIX>50-alltmlow=8.8 14.9
Advance/Dec-NYSE.. n/a 646/2592
Weekly Net: n/a -1946
     Cumulative: n/a 161903
Weekly  NYSE hi/low n/a 88/315
New Hi's/Low's Nasdaq h/l n/a 95/322
McClellan  Oscillator -53 -43
McClellanSum .+750/-1000 -272 -55
Newsletter Inv.Intel -Bull:tues 47.5 48
Surveys Bear:-5yrs 15.1 15.3
AAII  -Bull :wed. 35.4 41.8
Bear  30.9 28.2
COT:SPX w/w large/small (net)k n/a (1k)/35k
COT:gold  comm.hedg long-short.000 (64k)
CEOinsider selling 52:1 25:1
off.&bd b/s.vs. 10% holder b/s 175:40 175/35
3-box rev Bullish%-  65 70
US equity -ICI Fund Flows WeekDelay  (1.5B)
MMF flows Change in $B 22.8B 15B
MargDebt- top (300M) monthly  463B 463B
ETF:mthlyEqty/ Int'l/Bond-$B 1141/454/281 1141/454/281
2-yr Tsy Yield: Inflation 0.57% 0.58%nh

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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