Monday, August 24, 2015


Why is the stock market like a football passing game?

Answer: Only three things can happen - and only one of them good!
Stock markets (or individual stocks) can go Up, Down, or Sideways (UNCH); passes (even deflated ones) can be Caught, Incompleted, or Intercepted.

What a greeting from the stock market coming back from vacation! While helplessly on the road Friday, it gave the indication that it would resume today - did it ever. The rebound was impressive, whether it was from the Fed (as China is wont to do), short covering, or -from Barron's- increased stock But Backs. 60% of the S&P 500 stocks used them this year, versus 30% in 2011.

In his newsletter, master Technician John Murphy said the October 2014 lows had to hold to avoid a rout - today the SPX and Nasdaq did hold, the DJIA (30) did not. It has been nearly 4 years since we've had a meaningful correction in stocks, so this could be a blessing in disguise, however painful. Technically, in a Presidential (4 year) cycle, the pre-election year (2015) is by far the best performer - up 16% on average - we now have a ways to go to get there. 

Traditionally, JASON (July thru November) is the worst half of the year, with August, Sept., and Oct. the three worst - Nov. and Dec. are usually the best, along with January. Veteran analyst Laszlo Birinyi has called for 3200 on the SPX (500) within a couple years - that's a leap!!!

Sentiment - wise, the VIX leapt up to a rare 28 last week, and Advancing/Declining stocks (breadth) was dismal, as were the new highs to lows. One of my fave short term indicators - the McClellan Oscillator shot down through the -50 line: to -71, usually a BUY signal; better late than never. Money has been flowing into MMFs (money markets) for over a month now, and last week's Volume was huge, considering the heavy hitters were supposed to be on vaca (I guess the HFT computers were not).

Date> 8/21/2015 8/14/2015
Indices: DJIA  16459
  NAZ  4706
SPX  1970
WklyVolume (Bshs). naz/ny…. 9.6/4.5 8.8/4.1
Specul.Ratio hi=bullish 2.13 2.15
Sentiment: put/call-CBOE  84 74
VIX>50-alltmlow=8.8 28 12.8
Advance/Dec-NYSE.. 384/2878 1890/1362
Weekly Net: -2494 528
     Cumulative: 160295 162789
Weekly  NYSE hi/low… 143/697 164/379
New Hi's/Low's Nasdaq h/l 153/468 151/339
McClellan  Oscillator -71 20
McClellanSum .+750/-1000 -392 -370
Newsletter Inv.Intel -Bull 37.7 40.2
Surveys-Tues Bear:-5yrs 18.4 18.6
Wed. AAII  -Bull  26.8 30.5
Bear  33.3 36.2
COT:SPX w/w large/small (net)k 13k/(33k) N/A
COT:gold  comm.hedg long-short.000 (30k) N/A
COT:OIL comm.hedg long-short. (214k) N/A
US$-WSJ 87.8 N/A
CEOinsider selling .15:1 N/A
off.&bd b/s.vs. 10% holder b/s discont.
3-box rev Bullish%-  44 51
US equity -ICI Fund Flows weekDelay (2.3B)
MMF flows Change in $B 11.0B 8.3B
MargDebt- top (300M) monthly  505B JUNE:
ETF:mthlyEqty/ Int'l/Bond-$B 1250/514/314 JUNE:
2-yr Tsy Yield: Inflation 0.62% N/A
TIP (ETF) Inflation 112.2 v

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