AND THE HITS JUST KEEP ON COMING:

An optimist would opine that the deeper this surge goes, the larger the ensuing rally. Mark Liebovit's quite reliable market model calls for a December rally, as does Helen Meisner (Street.com's technician) with 30-day MAs of both Volume and A/D lines.
Several Sentiment Indicators are also in oversold areas -but could always go lower. As the DJIA tests its August and recent lows near 13,000 (if it breaks down it confirms the Dow Theory of Transport confirmation), Bullish extremes exist in the CBOE put/call ratio (76) and the Bears of Inv.Intell. at 26.5 - AAII Bears are at 49% ; the McClellan Osc. is still below -50 with its concomitant Summation at -417; New Lows to Highs are 7:1 on the big board, public shorting is double digits, and the mutual funders (-$10B outflows) are running for the money markets.
A final sign is the legal Insider Selling at only 7:1, still in Tech and healthcare, while largest Buying is in Finance and Energy. See below:
Mktsentiment. 11/16/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13177……….13042………..14093..............7286
Nasdaq………. 2637…………2627…………2810.............1114
S&P500…….. 1459…………1453…………1561………..776
CBOE Eq. put/call …76……………73……………91…..........46-1/03

VIX ………. 25.5…………28.5…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 141…………156……………246………..118
All Equities (ETF)
McClel Osc…………-54…………-70……………91-5/04.........(81)-5/04
McClelSum………-417………….-155…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….51.1…………54.5………..62.9-12/04......35-6/06
Bear:………… 26.7…………22.2………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……33/49.5………36.2/51.4……..n/a n/a
MarketVane Bulls…58…………….63…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.36………8.44….……8.95………. 4.0
Public/NYSE Spec.-…10.34……..11.86…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………on vaca……34.4/37.5…….
Bullish%- ………40……………54……….…88 -2/04...... 46-8/04
*Insider corporate sellers. 7:1…….13:1….
Sectors: Most Buyers: Finance, Energy
Most Sellers: Tech , Healthcare

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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AND THE HITS JUST KEEP ON COMING:

Apres le deluge:

This week's extremes in Sentiment readings include the McClellan Oscillator at -70, the inverted bull/bear ratio of the AAII surveys, and the CBOE Equity put/call ratio of 73 - all strong signs of a short term cessation of downside price action. Public shorting was high, as was short interest. Money market inflows were huge at 63B for the week:
Mktsentiment. 11/9/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13042………..13595………..14093..............7286
Nasdaq………. 2627…………2810………….2810.............1114
S&P500…….. 1453………….1509…………1561………..776
CBOE Eq. put/call …73……………63……………91…..........46-1/03

VIX ………. 28.5………….23…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 156………….165……………246………..118
All Equities (ETF)
McClel Osc…………-70…………-24………91-5/04.........(81)-5/04
McClelSum………-155…………..112…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….54.5………… 53.8………..62.9-12/04......35-6/06
Bear:………… 22.2…………23.1………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……36.2/51.4…….44.7/36.5……..n/a n/a
MarketVane Bulls…63……………64…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.44………8.63….……8.95………. 4.0
Public/NYSE Spec.-…11.86………8.31…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………34.4/37.5…….44.8/37.9
Bullish%- ………54………….62……….…88 -2/04...... 46-8/04
*Insider corporate sellers. 13:1…...26:1….
Sectors: Most Buyers: Finance (1/3 of total 10 sectors)
Most Sellers: Tech , Healthcare

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

Subscribe in a reader

Apres le deluge:

TRADING PLACES:

Despite being in the most volatile time of year (September-October) we seem to be stuck in a trading range bounded by less than 1,000 points on the DJIA. Most Sentiment Indicators seem to be stuck in midrange, and the extremes fluctuate at both ends.
Money Markets went from record Inflows of $36B the prior week to $33B record Outflows last week. ETFs saw a rather high level of $8B Inflows after weeks of selling. Insider trading by CEOs, VPs, et.al. was quite concentrated with 2/3 of total Buying in 1 of the 10 Sectors - Finance; meanwhile 1/3 of Selling was in Tech - both the opposite of Conventional Wisdom, and pundit prattling. Selling outdid Buying 26:1, up from 13:1.
Here are last weeks findings:

Mktsentiment. 11/2/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13595………..13806………..14093..............7286
Nasdaq………. 2810………….2805……….. 2810.............1114
S&P500…….. 1509…………1535…………1561………..776
CBOE Eq. put/call …63……………66……………91…..........46-1/03

VIX ………. 23……………22.9…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 165…………..246……………246………..118
All Equities (ETF)
McClel Osc…………-24………….-2………91-5/04.........(81)-5/04
McClelSum………112…………….280…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 53.8………..56.5………..62.9-12/04......35-6/06
Bear:………….... 23.1…………22.9………… 38.2-3/03.......16-6/03

AAII-Bull/Bear …...…44.7/36.5…….31.3/48.2……..n/a n/a
MarketVane Bulls….......64…………..63…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.63………8.56….……8.95………. 4.0
Public/NYSE Spec.-..…8.31……….6.96 …..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll …….....…44.8/37.9….44/42
Bullish%- ……........…54………….62……….…88 -2/04...... 46-8/04
*Insider corporate sellers..26:1….13:1
Sectors: Most Buyers: Finance (2/3 of total 10- sectors)
Most Sellers: Tech (1/3 of total)

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

Subscribe in a reader

TRADING PLACES:

"WITCH" WAY WEDNESDAY?:

This Wednesday, Hallowe'en, the Fed will announce its rate cut - not at the usual Tuesday 11:15 PST time. Some feel much of the reaction has already occurred, and the Indicators are just as ambivalent.
Although the CBOE put/call ratio is still somewhat high (Bullish), the ISEE - still in a newly revised range - is off the charts at 246 calls to puts! And the AAII Bears are far from hibernation as they invert the ratio 48 to 31 Bulls.
Corporate insider selling is way down from 43 to 13 to 1 over buyers (they are still buying their own Financial stocks but also selling them, along with Tech stocks).
Money Market inflows are still setting new record highs, at $35B last week. Market breadth, especially in the OTC area, is suspect considering the recent rally - new lows outpaced new highs, the Bullish Per Cent is still falling on a Sell signal given in Oct., and the Nasdaq to NYSE Volume (speculative warning) is at a 5-year high at 183.
Here are the weekly numbers:

Mktsentiment. 10/26 /2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13806………..13522…………14093..............7286
Nasdaq………. 2504…………2725……….. 2805.............1114
S&P500…….. 1535…………1500…………1561………..776
CBOE Eq. put/call …66……………65……………91…..........46-1/03

VIX ………. 19.6…………..22.9…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 246?................122……………246………..118
All Equities (ETF)
McClel Osc…………-2…………….-56………91-5/04.........(81)-5/04
McClelSum………280……………..440…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….56.5………… 62………..62.9-12/04......35-6/06
Bear:………… 22.9………….19.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……31.3/48.2….42.0/35.7……..n/a n/a
MarketVane Bulls….63……………65…………. 74..............24
UBS investor confidence..70………68………178……………53
(monthly change)
IBD: Short Interest- …8.56………8.76….……8.95………. 4.0
Public/NYSE Spec.-….6.96……….7.88…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………44.24………..50./33.3
Bullish%- 59……….....62…………88 -2/04......46-8/04
*Insider corporate sellers..13:1……43:1…
Sectors: Most Buyers: Finance
Most Sellers: Tech, Finance

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

Subscribe in a reader

"WITCH" WAY WEDNESDAY?:

THE BLACK SWAN:

Not the Australian wine, but an excellent book by Nassim Taleb about improbable events. Its 3 characteristics are: it is unpredictable, it has massive impact, and, most of all, looks very logical after the fact - examples are the Crash of '87, 9/11, the success of Google, and the past two weeks, when I have been on vacation without access to Barron's, IBD, CNBC, and e-mail.
After recouping 3 weeks of statistics, the following shows a high probability of the downturn occurring, even despite the expected mid-October cycle.
Here are some indications which lit the caution light in early October: the ISE call/put index hit a near high 164; the A/D on the NYSE was 2600 to 900, with further speculation from new highs/lows at 500 to 70. The McClellan Oscillator hit @ +50 and the Inv.Intell. Bulls reached 60 to 21 Bears; Nasdaq Volume to NY was a recent high of 179 and CEO insider selling rose to 43:1. Record amounts went into Money Market funds, and the IBD short interest rose to a record 8.95.
Here are last weeks stats:

Mktsentiment. 10/19 /2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13522……….14093…………14093..............7286
Nasdaq………. 2725…………2805……….. 2805.............1114
S&P500…….. 1500…………1561…………1561………..776
CBOE Eq. put/call …65……………58……………91…..........46-1/03

VIX ………. 22.9…………17.7…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 122……………164……………177………..118
All Equities (ETF)
McClel Osc…………-56……………12………91-5/04.........(81)-5/04
McClelSum………440………………280…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 62…………60.2………..62.9-12/04......35-6/06
Bear:………… 19.6………….21.5………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……42.0/35.7……..54.6/25.8……..n/a n/a
MarketVane Bulls….65……………69…………. 74..............24
UBS investor confidence..68……….73………178……………53
(monthly change)
IBD: Short Interest- …8.76……..8.95nh….……8.95………. 4.0
Public/NYSE Spec.-….7.88…..…7.89…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………50./33.3…….…36/40
Bullish%- ……….62……………...80……….…88 -2/04...... 46-8/04
*Insider corporate sellers..43:1………na
Sectors: Most Buyers: none
Most Sellers: healthcare

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

Subscribe in a reader

THE BLACK SWAN:

BYE, BYE:

Readers please be advised that for technical reasons, this column will not be updated for the next two weeks whilst I am on vacation (although I'll have my laptop, not all the research necessary to post). Giving a small talk last weekend at GGU on Sentiment allowed me to organize some matrices on the efficacy and order of importance of several Indicators, which I shall present when I return. Despite the recent parabolic runup, this is always a good time of year to be flat the market, or at least hedged.
Here are some small sampling factoids of interest:
Over the last 42 months, the number of times the SPX did not close at or below the expiration close by the end of that month: 6 (2 times in the past 2 years).
Over the last 30 months, number of times the SPX did not close at or higher than the Tuesday close before expiration (3 days before): 3
Times that the last day of a Quarter was negative over 13 quarters: 12
Times the DJIA was up the 4th Quarter over the past 27 years: 24.

This week's Indicators of Interest:
The McClellan Summation (cumulative Oscillator readings) went up throught the zero line this week - some view this as a positive. The Inv.Intell. and Market Vane surveys stretched to somewhat complacent. Both the Consumer Confidence and UBS Investor Optimism dropped to recent lows. Insider (officers) selling increased to 32:1, still Buying the Financials and Selling the Techs.
Public shorting shot up to 11 vs. what Specialists remain, and mutual funds suffered redemptions to money market funds.

Mktsentiment. 9/28/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13895……….13820………14001..............7286
Nasdaq………. 2701…………2671……….. 2707.............1114
S&P500…….. 1526…………1525…………1557……..776
CBOE Eq. put/call …66……………60…………… 91…..........46-1/03

VIX ………. 18…………….19…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 134……………151……………177………..118
All Equities (ETF)
McClel Osc…………27……………39………91-5/04.........(81)-5/04
McClelSum………62………………-60…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 55.6…………53.9………..62.9-12/04......35-6/06
Bear:………… 25.6………….27………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……49.4/34.2……..39.2/31.7……..n/a n/a
MarketVane Bulls….64……………64…………. 74..............24
UBS investor confidence..68……….73………178……………53
(monthly change)
IBD: Short Interest- …8.66……..7.77….………8.66………. 4.0
Public/NYSE Spec.-….11.09.88…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………22.6/53.2…….…22.6/53.2
Bullish%- ……….63……………...62……….…88 -2/04...... 46-8/04
*Insider corporate sellers..32:1………28:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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

Subscribe in a reader

BYE, BYE:

SLIP SLIDING AWAY:

Recently on CNBC, Robert Stovall, the Fundamental dinosaur and ultimate disser of Technical Analysis, expounded the technical study that, more often than not, the final week of September (and the U.S.Gov't's fiscal year) is a downer. Today's continuation of the Ben-efit rate cut is ending the day with yet another 100 point swing to the downside- not boding well for the week. In a study I've been doing, in 36 of the past 42 months the SPX has made a lower or even close between option expiration and the end of the month.
As one might expect, Bullish sentiment has rebounded with the rate cut and concomitant market rise: the CBOE put/call ratio dropped as the ISE call/put ratio rose materially; all the newsletter surveys jumped up to the Bullish camp, yet Public shorting rose vs. Specialists (those that are left). Corporate insiders are selling (Tech and Energy) while buying Finance at a 28:1 clip. Finally, investment money has stopped going into Money market funds and mutual funds, but sent 28 Billion into ETFs for the week.
Here are the stats:

Mktsentiment. 9/21/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13820……….13442………14001..............7286
Nasdaq………. 2671…………2602……….. 2707.............1114
S&P500…….. 1525…………1484…………1557……..776
CBOE Eq. put/call …60……………68………… 91…..........46-1/03

VIX ………. 19…………….34.9………44 9/02........10.0-7/05

ISEE-call/put ……. 151……………118………..177………..118
All Equities (ETF)
McClel Osc…………39…………….31………91-5/04.........(81)-5/04
McClelSum………-60……………..-246…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 53.9…………48.3………..62.9-12/04......35-6/06
Bear:………… 27……………31.0………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……39.2/31.7……..40/35.3……..n/a n/a
MarketVane Bulls….64…………… 58…………. 74..............24
UBS investor confidence..73………..87……………178……………53
(monthly change)
IBD: Short Interest- …7.77………..7.41….………8.25………. 4.0
Public/NYSE Spec.-….9.88………...7.85…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ……22.6/53.2………26.9/50
Bullish%- ………...62…………..54……….…88 -2/04...... 46-8/04
*Insider corporate sellers..28:1……..22:1
Sectors: Most Buyers: Finance
Most Sellers: Tech, Energy

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

Subscribe in a reader

SLIP SLIDING AWAY: