Monday, May 4, 2015

M'aidez, May Day

Help me... understand these paradoxes: "Experts" in weather prediction become less accurate the farther out in time they opine; the same is true of Economists (remember the saying- "you can lay all the world's Economists end to end and they would never reach an agreement!". However, studies show that the farther out in time Investors choose, the better their returns.  Contrary to my Technical/short term experience of thirty years, passive investors excel. In other words, sloth and ignorance beats effort and intelligence!!

I recently saw a chart from Schwab showing over 40 years the Stalwart who remained in the market investing annually earned $1,600,000 as of 2013; the  Reactor, bailing after 1987 and 2000 earned $1,063,000 and the Waffler, getting out after each major correction, earned less than $1,000,000! And that does not include DCA, or Dollar Cost Averaging, (buying at the bottoms) which would compound even much more.

So even though the shorter time that "average" traders employ renders the worst profits, the CBOE decides that in a few weeks or so Weekly expiration options will be available on the VIX - just like many stocks and indices. Hoo Haa.

 In the Sentiment area two records were set last week - neither very good predictors of market direction: the monthly figures for March showed new highs in ETFs buying - for stocks, bonds and int'l; also a record was margin interest, after backing off recently. Also high, but slow to predict, was Insider Selling, both by CEOs and all Insiders.

Money continues to flow OUT of MMFs and managed MUFunds (mutual); and commercial shorts increased yet again on both Gold and Oil, although both have acted well recently. Technicians can find a high correlation between the Dollar topping mid-March and Oil bottoming.

Here are the numbers:
Date> 5/1/2015 4/24/2015
Indices: DJIA  18024 18080
  NAZ  5005 5092
SPX  2108 2117
WklyVolume (Bshs). naz/ny…. 10.0/4.3 8.7/3.7
Specul.Ratio hi=bullish 2.33 2.35
Sentiment: put/call-CBOE  66 61
VIX>50-alltmlow=8.8 12.7 12.3
Advance/Dec-NYSE.. 1046/2180 2215/1009
Weekly Net: -1134 1206
     Cumulative: 168238 168248
Weekly  NYSE hi/low… 220/91 266/42
New Hi's/Low's Nasdaq h/l 258/180 313/112
McClellan  Oscillator -27 13
McClellanSum .+750/-1000 488 568
Newsletter Inv.Intel -Bull 57.4 52.5
Surveys-Tues Bear:-5yrs 13.9 15.2
Wed. AAII  -Bull  30.8 31.5
Bear  22 23.2
COT:SPX w/w large/small (net)k 11k/(17k) 11k/(14k)
COT:gold  comm.hedg long-short.000 (107k) (105k)
COT:OIL comm.hedg long-short. (320k) -325
US$-WSJ 85.8 86.4
CEOinsider selling NA 49:1
off.&bd b/s.vs. 10% holder b/s .160/40  .160:25
3-box rev Bullish%-  68 74
US equity -ICI Fund Flows WeekDelay (3.4B)
MMF flows Change in $B (5.9B) (6.9B)
MargDebt- top (300M) monthly  476Bnh March
ETF:mthlyEqty/ Int'l/Bond-$B 1268/472/318 March
2-yr Tsy Yield: Inflation 0.60% 0.51%
TIP (ETF) Inflation 113.89 115.02

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

Subscribe in a reader


No comments:

Post a Comment