Market Sentiment - A Contrarian View: 20 K

Monday, January 30, 2017

20 K - SO WHAT

It took 50 years for the DJIA to grow from 1,000 (in 1966) to now, for an average annual gain of 2.5%; Before that it grew from 40 at its inception in 1896 (if memory serves) to 1,000 - 70 years, at a rate of 2.8%. Big Deal, especially considering the addition in 2004 of the FANG-type stocks and the Fed led rally from '09, which makes the chart look parabolically dangerous.
Also parabolic is the chart of Insider Selling in Barron's this week, although that correlation to market movement is not very tight (Insider Buying is better.
Also Fake News - if adjusted for Inflation, the Nasdaq should be around 7,000, not 5,600 if you use 40% compounded Infl. from the year 2000.

Outstanding numbers for last week's Sentiment columns below were still the margin debt (second highest since 1930); AAII Bears outnumbered the Bulls % for the first time in awhile, and the $$ flowed dramatically from equity funds back into MMFs week over week. Finally, NYSE new highs to lows broke the 10:1 ratio.

Date		1/27/2017	1/20/2017
Indices:	DJIA	20093	19827
	NAZ	5660	5555
	SPX	2294	2271
WklyVolume (Bshs).	naz/ny….	8.8/4.1	6.9/3.4*
Specul.Ratio hi=bullish		2.15	2.03
Sentiment:	put/call-CBOE	67	64
VIX>50-alltmlow=8.8		10.6	11.5
DeltaMSI-50%	MAC crossover	72.9	74.2
Advance/Dec-NYSE..		2115/994	1222/1869
Weekly Net:		1121	-647
Cumulative:		173082	171961
Weekly	NYSE hi/low…	498/41	213/42
New Hi's/Low's	Nasdaq h/l	464/108	231/79
McClellan	Oscillator	3	-8
McClellanSum	.+750/-1000	682	627
Newsletter	Inv.Intel -Bull	58.2	60.6
Surveys-Tues	Bear:-5yrs	17.5	17.3
Wed.	AAII -Bull	31.6	37
	Bear	33.5	32.7
US$-WSJ		100.5	100.8
3-box rev	Bullish%-	73	73
US equity -ICI	Fund Flows	WeekLate	(3.7B)
MMF flows	Change in $B	19.7B	(24.7B)
MargDebt- top (300M)	monthly	500B	NOV.
10-yr Tsy yield	hi= stock buying	2.5	2.5
2-yr Tsy Yield: Inflation		1.2	1.2
TIP (ETF)	Inflation	114	113.7

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