Monday, February 15, 2016


Lots of Volatility last week, but going nowhere fast. Or as Yogi Berra once said: "We're lost but making good time". Pick whatever Fundamental reason you like - Yellen, short covering, Oil, - the end of the week turned right around again, and looks to resume the upward move in this shortened week.
As GGU's Dr. Hank Pruden pointed out in last Saturday's excellent fact-filled 2-hour promo for his upcoming class - Double Helix Power of Combining Wyckoff and Elliott Wave Method, except for the DJIA, markets have been making lower lows - not a good sign.

As shown below, both newsletter surveys (which report Tues. and Wed.) report large numbers of BEARS (Bullish FOR the market). And with the rest of the globe going to Negative interest rates, holding Gold with no dividends isn't such a bad idea, especially if it is oversold these past months.
Even the 2-year Treas. yield is dropping fast - from above 1% recently to 0.71%.

Finally, since writing my book on DITM ( Deep-In-The-Money) covered call options in 2010, the current environment looks like the best it's been since then: quality stock prices have dropped bigtime; which makes the dividend yield that much higher; and dropping prices makes huge increases in the IV (Volatility) of call options, which one is selling. Being ITM also gives a nice cushion for the stock to drop even further.

Here are the numbers from last week:
Date> 2016 2/12/2016 2/5/2016
Indices: DJIA  15973 16204
  NAZ  4337 4363
SPX  1864 1880
WklyVolume (Bshs). naz/ny…. 12.3/6.1 11.2/5.6
Specul.Ratio hi=bullish 2.01 2
Sentiment: put/call-CBOE  83 78
VIX>50-alltmlow=8.8 25.4 23.4
Advance/Dec-NYSE.. 728/2476 1072/2133
Weekly Net: -1748 -1061
     Cumulative: 155343 157091
Weekly  NYSE hi/low… 144/978 197/378
New Hi's/Low's Nasdaq h/l 31/920 54/464
McClellan  Oscillator -4 15
McClellanSum .+750/-1000 -668 -560
Newsletter Inv.Intel -Bull 24.7 34
Surveys-Tues Bear:-5yrs 39.2 38.1
Wed. AAII  -Bull  19.2 27.6
Bear  48.7 34.7
US$-WSJ 96 97
3-box rev Bullish%-  30 38
US equity -ICI Fund Flows WeekLate 2.3B
MMF flows Change in $B 3.2B (4.2B)
MargDebt- top (300M) monthly  461B DEC.
2-yr Tsy Yield: Inflation 0.71% 0.73%
TIP (ETF) Inflation 111.6 111.4

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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