Monday, April 18, 2016


Other than the Warriors' expected victory, the high point of  this past weekend was a 2-hour class/tutorial (free) at the S F Options Group meetup at Fort Mason by Richard Lehman on Options and Volatility - Outstanding - I even bought his and Larry McMillan's book: Options For Volatile Markets! What I learned most was to abandon my hedging positions of TVIX (which has no options, and has broken down below its longterm Support) in favor of UVXY which, just as NUGT for gold miners, has HUGE IV or Implied Volatility - which is the "juice" one sells to make big bucks.

It was great to see old friends again, after my recoop time from knee replacements, and even got an invite to give my DITM (covered call) talk to the Silicon Valley Option Group sometime this summer.  Although I discovered this income strategy (in a zero interest rate world) back in 2009, it seems to me more timely now, as the Bull market wears down, and rates seem to be destined to stay low ( even negative??).

Last week's Sentiment Indicators were very similar to the previous week's dramatic one, with the McClellan Summation (of the weekly Oscillator) again breaching the 1,000 mark - Positive Advances/Declines. If breadth continues strong it can (eventually) break up through the indices all-time highs. DJIA 18,351 (today 17.968); S&P 500 2,134 (today 2089).
Here are today's numbers:

Date> 2016 4/15/2016 4/8/2016
Indices: DJIA  17897 17576
  NAZ  4938 4850
SPX  2080 2047
WklyVolume (Bshs). naz/ny…. 8.5/4.8 8.6/4.5
Specul.Ratio hi=bullish 1.77 1.97
Sentiment: put/call-CBOE  65 68
VIX>50-alltmlow=8.8 13.6 15.4
DeltaMSI-50% MAC crossover n/a 74%
Advance/Dec-NYSE.. 2503/664 1225/1958
Weekly Net: 1839 -733
     Cumulative: 165082 163243
Weekly  NYSE hi/low… 276/20 277/47
New Hi's/Low's Nasdaq h/l 140/74 126/91
McClellan  Oscillator 16 -17
McClellanSum .+750/-1000 1020 940
Newsletter Inv.Intel -Bull 41.2 45.4
Surveys-Tues Bear:-5yrs 27.8 27.8
Wed. AAII  -Bull  27.9 32.2
Bear  24.9 21.5
US$-WSJ 94.7 94.2
3-box rev Bullish%-  77 76
US equity -ICI Fund Flows weekLate (5.3B)
MMF flows Change in $B (7.7B) (26.7B)
MargDebt- top (300M) monthly 
2-yr Tsy Yield: Inflation 0.74% 0.70%
TIP (ETF) Inflation 114.3 116

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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