Tuesday, July 5, 2016


As we end the 4th of July weekend, we enter JASON in the stock market: July through November. If history be our guide, the (legal) Insider Trading chart does not bode well for this underperforming semi-annual cycle. Previous tops of high selling by corporate Insiders came in July of last year, October, and this past April.
A longer chart shows households with an above average percentage of stock holdings, which could lead to an underperforming next decade; especially after the Fed-led rally of the past one. Another negative is my new Sentiment Indicator - the Delta MSI (market sentiment) - showing just above 50% of stocks on a Buy signal (Moving Averages). This mirrors its sibling the Bullish % with the same number (see below).

Other standouts are the 2 and 10-year Treasuries yields dropping; the TIP Inflation ETF at a recent high of almost 117 (123 is the long term high); and on the Bullish case, the AAII Bears dominate the Bulls 33 to 29.
Here are the numbers:
Date>   7/1/2016 6/24/2016
Indices: DJIA  17949 17400
  NAZ  4862 4708
SPX  2102 2037
WklyVolume (Bshs). naz/ny…. 10.6/5.7 10.6/6.0
Specul.Ratio hi=bullish 1.86 1.77
Sentiment: put/call-CBOE  64 74
VIX>50-alltmlow=8.8 14.8 25.8
DeltaMSI-50% MAC crossover 52% 62%
Advance/Dec-NYSE.. 2504/653 1243/1916
Weekly Net: 1851 -673
     Cumulative: 168665 166814
Weekly  NYSE hi/low… 587/159 391/73
New Hi's/Low's Nasdaq h/l 205/277 167/194
McClellan  Oscillator 46 -21
McClellanSum .+750/-1000 815 772
Newsletter Inv.Intel -Bull 41.6 47.5
Surveys-Tues Bear:-5yrs 23.8 23.2
Wed. AAII  -Bull  28.9 22
Bear  33.4 35.2
US$-WSJ 95.6 95.5
3-box rev Bullish%-  52 60
US equity -ICI Fund Flows WeekLate (4.2B)
MMF flows Change in $B 14.9B (3.6B)
MargDebt- top (300M) monthly  451B
10-yr Tsy yield hi= stock buying 1.44% 1.56%
2-yr Tsy Yield: Inflation 0.60% 0.63%
TIP (ETF) Inflation 116.8 115.8

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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