FED UP

For weeks now the  only topics in the media - print, online, and video - have been Politics and Viagra commercials (Elections and Erections). Finally they have shifted to what the Fed is going to do about interest rates come June, including interviews with the neighborhood gardener and other experts.
Funnily enough, according to technical analysis studies, markets actually like the first couple of rate hikes, before hitting its average, then pendulum-swinging too far. That is, if the economy warrants it - as it did NOT in December, when January made them pay.

I'm not much of a bond guy - especially now with Zero rates - but a very insightful column by Ben Levisohn in Barron's Streetwise piece, talks of the January Crashette with conditions similar now if a June hike is imminent (odds are increasing). Ben posits that when the 10-year Treas yield rises (bond prices fall) it is good for the stock market, so I'll be adding the 10-year to my 2-year Inflation indicator, which is registering nothing these days. Another bond column signals that if the 10-year minus the 2-year yield gets down to zero (flat) it almost always signals a Recession and/or Bear market.
Unfortunately, my switch to the UVXY hedge is not working out as planned, although better than the TVIX hedge, since I am milking a huge covered call premium on it. It has de-correlated from the VIX, due to Beta-slippage and futures rollovers. Still, a crash before Sept. would be profitable. After all, Put options have more decay as hedges.
Most Sentiment Indicators are benign, with breadth and A/D in stocks weakening. Here are the numbers:

Date>		5/20/2016	5/13/2016
Indices:	DJIA	17500	17535
	NAZ	4769	4717
	SPX	2052	2046
WklyVolume (Bshs).	naz/ny….	9.3/4.6	8.8/4.6
Specul.Ratio hi=bullish		2.02	1.91
Sentiment:	put/call-CBOE	75	84
VIX>50-alltmlow=8.8		15.2	15
DeltaMSI-50%	MAC crossover	63%	70%
Advance/Dec-NYSE..		1515/1653	1361/1793
Weekly Net:		-138	-432
Cumulative:		165383	165521
Weekly	NYSE hi/low…	277/76	445/80
New Hi's/Low's	Nasdaq h/l	115/212	137/201
McClellan	Oscillator	-31	-46
McClellanSum	.+750/-1000	723	922.0
Newsletter	Inv.Intel -Bull	40.2	39.2
Surveys-Tues	Bear:-5yrs	21.7	21.6
Wed.	AAII  -Bull	19.3	20.4
	Bear	34.1	31.3
US$-WSJ		95.3	94.6
3-box rev	Bullish%-	67	70
US equity -ICI	Fund Flows	WeekLate	(7.4B)
MMF flows	Change in $B	4.3B	5.7B
MargDebt- top (300M)	monthly		MARCH
10-yr Tsy yield	hi= stock buying	1.84%
2-yr Tsy Yield: Inflation		0.88%	0.75%
TIP (ETF)	Inflation	114.1	115.2

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: brentleonard.com 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 Amazon.com: Zero (IN)Tolerance

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FED UP