Monday, March 16, 2015


The number one topic of finance media these days is when will the Fed hike rates after 6 years of Zero. The vast majority of talking heads opine that it will be the death knell for stocks - although I disagree, according to previous hikes. In this week's Barron's Steve Sears, the Option Guy, points out that stocks consistently rise before and after the hikes, based on average going back to 1955.

Recently I have been advising family and friends to invest for the long haul using either Vanguard or Schwab INDEX funds, preferably dividend ones. Fees from managed funds can eat up your retirement $$ all the way up to 66% going to them - per a Frontline program recently aired. Compounding annual fees! In fact, last week a spokesperson for S&P IQ (Standard & Poors staff) stated in an interview that the average managed mutual fund underperformed the Index 77 to 81% of the time since 2000; even small cap funds were weaker; and even in high volatility times - such as 2000 and 2008 they gained less.

With stocks regressing back to zero for the year last week (not counting today) Sentiment extremes looked hopeful. Contrarians like small traders increasing shorts to 40k, up from 22k; Insider selling by CEOs fell sharply from 71:1 over buyers to 20:1, even during Income Tax time.

Finally, mutual fund assets swung from $18B outflows to $18B inflows.

Here are last week's numbers:

Date> 3/13/2015 3/6/2015
Indices: DJIA  17749 17856
  NAZ  4871 4927
SPX  2053 2071
WklyVolume (Bshs). naz/ny…. 9.0/3.9 9.3/3.8
Specul.Ratio hi=bullish 2.33 2.45
Sentiment: put/call-CBOE  69 6
VIX>50-alltmlow=8.8 16.0 15.2
Advance/Dec-NYSE.. 1411/1834 843/2411
Weekly Net: -423 -1568
     Cumulative: 164739 165162
Weekly  NYSE hi/low… 180/222 362/98
New Hi's/Low's Nasdaq h/l 236/166 308/125
McClellan  Oscillator -38 -47
McClellanSum .+750/-1000 382 586
Newsletter Inv.Intel -Bull:tues 53.6 58.7
Surveys Bear:-5yrs 14.1 14.1
AAII  -Bull :wed. 31.6 39.8
Bear  25.4 23.4
COT:SPX w/w large/small (net)k 1k/(42k) 2k/(22k)
COT:gold  comm.hedg long-short.000 (89k) (123k)
CEOinsider selling .20:1  .71:1
off.&bd b/s.vs. 10% holder b/s .160:45 .160:35
3-box rev Bullish%-  71 75
US equity -ICI Fund Flows WeekDelay (1.9B)
MMF flows Change in $B 18.2B (18.6B)
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.66% 0.73%
TIP (ETF) Inflation 111.51 111.97

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: 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 Zero (IN)Tolerance

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