GETTING SENTIMENTAL (NOT FUNDAMENTAL)

Twenty years ago I got my CMT designation (Chartered Market Technician) from the Market Technician's Ass'n, comparable to a Master's - three levels over three years, including a thesis which was on Sentiment, or Contrary Opinion, sometimes viewed as the fourth leg of the Technical Analysis stool of Price, Volume over Time. Since then I have written a blog on the Indicators I feel are most meaningful as to market direction, short and long term. Important to remember is that change of direction occurs when a majority of Indicators reach EXTREME; the "crowd is usually right during the trend!

For new readers I wanted to explain the matrix below and how to use these.

First, the major Indices - Dow 30, Nasdaq or Over The Counter, and S&P 500 (SPX) levels, week over week.
Nasdaq to NYSE (New York Stock Exchange) Volume indicates the level of speculation- high OTC.
The CBOE (Chicago Board of Options Exchange) put/call ratio measures how afraid traders are of the immediate future - buying put options to hedge or speculate on a downturn - this is one of the better short term signs, as they are usually wrong- i.e., high put/calls are Bullish.

The VIX, or Volatility Index is more intermediate term and coincident, rather than leading - at current low levels (12 or 13) it could foretell an imminent drop in the market - VIX calls can be used as a hedge, as they rise in downturns.

Advance/Declines are Breadth Indicators, showing investors' confidence in stocks - they have been negative most recent weeks.

Two market survey letter - the Intelligent Investor, put out by wire houses on broker advice, and AAII, or Independent Investors polled by postcard weekly, are also contrary Bull/Bear signals. High Bulls on either, especially AAII, are dangerous short term.

COT or Commitment of Traders is a record of trades done on various commodities, with commercials hedging being the "Smart Money". Various records of Insider Trading - CEOs, 10% holders, etc. have been boringly stable recently and of no apparent use. Fund flows are also of interest, but not actionable. Margin Debt is at record levels (with low interest rates) but are coincident.

Here are last weeks numbers:

Date>		5/29/2015	5/22/2015
Indices:	DJIA	18010	18232
	NAZ	5070	5089
	SPX	2107	2126
WklyVolume (Bshs).	naz/ny….	7.2/3.4	8.3/3.4
Specul.Ratio hi=bullish		2.12	2.44
Sentiment:	put/call-CBOE	64	64
VIX>50-alltmlow=8.8		13.8	12.1
Advance/Dec-NYSE..		965/2259	1496/1731
Weekly Net:		-1294	-235
Cumulative:		166797	168091
Weekly	NYSE hi/low…	148/132	265/110
New Hi's/Low's	Nasdaq h/l	190/142	300/152
McClellan	Oscillator	-34	-8
McClellanSum	.+750/-1000	175	274
Newsletter	Inv.Intel -Bull	48.5	50.6
Surveys-Tues	Bear:-5yrs	14.9	15.8
Wed.	AAII  -Bull	27.0	25.2
	Bear	25.1	25.0
COT:SPX w/w	large/small (net)k	8k/(16k)
COT:gold  comm.hedg	long-short.000	(110k)	(133k)
COT:OIL comm.hedg	long-short.	(345k)	(350k)
US$-WSJ		87.3	86.3
CEOinsider	selling	27:1	36:1
off.&bd b/s.vs.	10% holder b/s	.160/20	.160/50
3-box rev	Bullish%-	64	64
US equity -ICI	Fund Flows	WeekDelay	(5.4B)
MMF flows	Change in $B	4.6B	20.6B
MargDebt- top (300M)	monthly	507B
ETF:mthlyEqty/	Int'l/Bond-$B	1256/519/318
2-yr Tsy Yield: Inflation		0.61%	0.62%
TIP (ETF)	Inflation	113.21	112.93

 

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GETTING SENTIMENTAL (NOT FUNDAMENTAL)