RAISE THE ROOF !:

How about we start the Cap and Cut of the Budget by halting paychecks for the President and Congress? It worked for California.How about snugging up interest rates? According to the AIER, the nearly $20T in interest rate sensitive securities have cost $587B in consumption and 4 1/2 million jobs.

So far, stocks and Treas are calling Congress' bluff - both up for last week. Speculative NASD to NYSE Volume is at a recent record high; most other indicators regressed to the mean. The McClellan Oscillator is hovering around the zero line, as Tom is calling for a short term cycle bottom this week, but lower stocks going into October. Money Market flows reversed from $10B IN to $25B OUT, I know not where. US Mutual equity fund flows have been negative since April 22, when the S&P500 was $1 lower than today - maybe the public isn't that dumb!

Last February I started keeping track of COT (Commitment of Traders) for the S&P500 -during that whole time, including last week :large traders were (slightly) short and small traders (dumb money) long bigtime. Finally, Insider Selling jumped largely, with almost no Buying, to 63:1.

FYI - My book on Zero Rates - Zero (IN)Tolerance - should be out this week in eReader form (except Kindle , so far), at 2/3 the print book price, and updated.

Here are the results of last week:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	12479	12657	14093	6626
Nasdaq:	2789	2859	2861	1114
S&P 500:	1316	1343	1561	683
CBOE Eq. put/call:	71	62	96-10/08	46-1/03
VIX:	19.5	16.0	90	8.8
McClellan Osc:	(11)	49.9	108	(123)
McClellan Sum:	497	524	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	44.1	40.9	63	22.21
InvestorsIntel.Bear:	22.6	24.7	54.4	16
AAII Bull:	39.3	41.8	n/a	n/a
AAII Bear:	29.2	24.7	n/a	n/a
US Equity-1 week lag	n/a	(4.5B)
Money Market Flows	9.7B	3.9B
Baltic Dry Index:	1367	1453	11700	663
Bullish %:	69	71	89	2
Insider Corporate Sellers:	42:1	58:1	235:1	2.4:1

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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RAISE THE ROOF !:

PIXED MIXTURE:

Last week's sentiment indicators are giving  a mixed picture on the direction of the market - confusion of the debt ceiling is driving money out of equity mutual funds and back into MMFunds, even though they are reported to have European securities in them, for slightly enhanced yields! Risk/Reward?

The usually reliable CBOE put/call ratio at 71 assumes a higher market, possibly after the resolution of the above; but newsletter surveys are complacent and getting moreso; key officers' Insider Selling is still high, with almost no Buying.

Also negative FOR the market, Bullish % is high and COT (commitment of Traders) has smart money still shorting, with small speculators long. A sustained break below 1260 S&P 500 would make me change my Bullish stance for year-end.

Nasdaq:	2789	2859	2861	1114
S&P 500:	1316	1343	1561	683
CBOE Eq. put/call:	71	62	96-10/08	46-1/03
VIX:	19.5	16.0	90	8.8
McClellan Osc:	(11)	49.9	108	(123)
McClellan Sum:	497	524	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	44.1	40.9	63	22.21
InvestorsIntel.Bear:	22.6	24.7	54.4	16
AAII Bull:	39.3	41.8	n/a	n/a
AAII Bear:	29.2	24.7	n/a	n/a
US Equity-1 week lag	n/a	(4.5B)
Money Market Flows	9.7B	3.9B
Baltic Dry Index:	1367	1453	11700	663
Bullish %:	69	71	89	2
Insider Corporate Sellers:	42:1	58:1	235:1	2.4:1

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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PIXED MIXTURE:

"HERD" SHOT AROUND THE WORLD:

If Pro is the opposite of Con, is Congress the opposite of Progress? BTW, why do they call them "parties"? As they debate the debt ceiling, the market goes through the floor until Aug.2 (or later). Meanwhile corporations are paralyzed with confusion. Two months ago Key Officer Insider Selling to Buying set a new record of 235:1; last week it popped to 58:1 from 13, with almost no buying in all sectors.
After 2 months of downturn, last week's End-of-Quarter Rally saw improving breadth - my cumulative A/D set a new record high, and NYSE new highs/lows were 366 to 30. The McClellan Oscillator is still overbought at 50%; and newsletters are getting complacent.
Which is why I'm very defensive these days, in the weakest part of the year, with my DITM covered call strategy, which I am updating this Saturday for the SF Bay Area Option Group at Fort Mason. Today's drop has only 3 of my 30 position "temporarily under water". I recommend everyone take a look at this plan for at least a portion of their assets receiving 0% in CDs, MMFs; negative after taxes, Inflation, and a weakening dollar. See brentleonard.com for info on DITM - the eBook is currently being formatted.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	12657	12582	14093	6626
Nasdaq:	2859	2816	2861	1114
S&P 500:	1343	1339	1561	683
CBOE Eq. put/call:	62	57	96-10/08	46-1/03
VIX:	16.0	15.9	90	8.8
McClellan Osc:	49.9	90	108	(123)
McClellan Sum:	524	248	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	40.9	39.8	63	22.21
InvestorsIntel.Bear:	24.7	26.9	54.4	16
AAII Bull:	41.8	38.3	n/a	n/a
AAII Bear:	24.7	30.2	n/a	n/a
US Equity-1 week lag	n/a	(3B)
Money Market Flows	3.9B	(16.9B)
Baltic Dry Index:	1453	1420	11700	663
Bullish %:	71	68	89	2
Insider Corporate Sellers:	58:1	13:1	235:1	2.4:1

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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"HERD" SHOT AROUND THE WORLD:

WINDOW DRESSING:

Talk about ending a quarter with a bang! After wild swings in Q2, the S&P 500 ended right where it started in April. Responding to the reliable Sentiment Indicators such as the CBOE put /call ratio at 90 a couple of weeks ago, and an inverted AAII Bull/Bear ratio, the market roared back almost to the high seen early May. Also alerting investors: the McClellan Oscillator at -68 and its concomitant Summation in a rare negative area. Money has been flowing out of Zero MMFs, but not into equity funds.
Currently we see signs of overbought short term, with the McClellan Oscillator at plus 90! The  VIX is below 16 again , and the Bulls are starting to get complacent.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	12582	11934	14093	6626
Nasdaq:	2816	2652	2861	1114
S&P 500:	1339	1268	1561	683
CBOE Eq. put/call:	57	61	96-10/08	46-1/03
VIX:	15.9	21.19	90	8.8
McClellan Osc:	90	(9)	108	(123)
McClellan Sum:	248	(11)	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	39.8	37.6	63	22.21
InvestorsIntel.Bear:	26.9	28	54.4	16
AAII Bull:	38.3	37.5	n/a	n/a
AAII Bear:	30.2	35.7	n/a	n/a
US Equity-1 week lag	n/a	(4.3B)
Money Market Flows	(16.9B)	(8.1B)
Baltic Dry Index:	1420	1409	11700	663
Bullish %:	68	60	89	2
Insider Corporate Sellers:	13:1	18:1	235:1	2.4:1

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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WINDOW DRESSING:

JUNE SWOON:

Is the June Swoon over, or we just entering the JASON bad cycle where Fall means just that? Having reached Support from a Wyckoffian selloff to the 200MA and Jan. previous levels, can we achieve the conventional wisdom of a higher SPX by year-end?
The CBOE put/call ratio is still high, coming off a very high number, but the VIX doesn't echo fear. Inverted Bull/Bear sentiment has again righted itself, after calling a minor bottom. Money is flowing out of equity funds, but also out of MMFs.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	11934	12004	14093	6626
Nasdaq:	2652	2616	2861	1114
S&P 500:	1268	1271	1561	683
CBOE Eq. put/call:	61	93	96-10/08	46-1/03
VIX:	21.1	21.9	90	8.8
McClellan Osc:	(9)	(31)	108	(123)
McClellan Sum:	(11)	(41)	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	37.6	37.0	63	22.21
InvestorsIntel.Bear:	28	26	54.4	16
AAII Bull:	37.5	29	n/a	n/a
AAII Bear:	35.7	42.8	n/a	n/a
US Equity-1 week lag	n/a	(5.5B)
Money Market Flows	(8.1B)	(34.4B)
Baltic Dry Index:	1409	1423	11700	663
Bullish %:	60	60	89	2
Insider Corporate Sellers:	18:1	62:1	235:1	2.4:1

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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JUNE SWOON:

BOTTOMS UP?:

Several Indicators are intimating to me that we may have reached a temporary shelf off the S&P 1260 200MA (11,800 on the DJIA). With a choppy week like a puppy shaking a rag doll every day, the McClellan Summation fell through the zero line for the first time in years; the Oscillator hit -63 the week before and is still negative; what also stood out is the CBOE Equity put/call ratio at 93! Bearish ON the market but Bullish FOR it. The AAII Bull/Bear ratio is still inverted, although the Inv.Intell. is not - thanks to a reader I have found a website that carries the I.I.

Finally, big money is coming out of both MMFs and Equity funds on a weekly basis. And although the legal Insider Selling is well of the record of 235:1 recently, it is high at 62:1. For some unknown reason the Technology selling of key officers is HUGE - over $700M for the second week in a row - I know college is expensive, but... Shortly behind is Consumer Services, over $400M. For years, total sales of all the 10 sectors rarely exceeded $700M.
 
EVERYONE is forecasting an UP yearend, even the good projectors - due to corporate earnings and values; still we are in the JASON semi-annual cycle (June,August,Sept.,Oct.,Nov.). In my mind, the DITM (deep-in-the-money) strategy that I have been successfully testing for over 2 years, is the optimal strategy for this time of the investment cycle:  a Wyckoff selloff, entering a Trading Range where stock prices are lower, dividend %s are higher, and option Volatility is also raised with the selloff - see www.ditmcalls.blogspot.com for recent and historic trading results.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	12004	11951	14093	6626
Nasdaq:	2616	2643	2861	1114
S&P 500:	1271	1270	1561	683
CBOE Eq. put/call:	93	86	96-10/08	46-1/03
VIX:	21.9	18.9	90	8.8
McClellan Osc:	(31)	(68)	108	(123)
McClellan Sum:	(41)	181	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	37	40.9	63	22.21
InvestorsIntel.Bear:	26	22.6	54.4	16
AAII Bull:	29.0	24.4	n/a	n/a
AAII Bear:	42.8	47.7	n/a	n/a
US Equity-1 week lag	n/a	(5.5B)
Money Market Flows	(34.4B)	15.9B
Baltic Dry Index:	1423	1418	11700	663
Bullish %:	60	64	89	2
Insider Corporate Sellers:	62:1	48:1	235:1	2.4:1

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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BOTTOMS UP?:

THE MARKET- OUT OF INTENSIVE CARE;

but still in the hospital! Hopeful signs of recovery are being shown in some of the Sentiment Indicators: my newest indcator - NASD Volume (speculation) divided by NYSE Volume is down from the 2 handle; CBOE Equity put/calls have leaped from 57 2 weeks before to 86 last week; the McClellan Oscillator is below my oversold benchmark of -50 at -68. Also, the AAII Bull/Bear ratio is fearfully nervous at 24 to 47!

Another new indicator I've been following is COT, or commitment of traders - specifically large speculators vs. small. Large ones (the smart money) hit a high shorting number not seen since the March rally this spring.

Finally, although the (legal) Insider Selling is quite high but not record, what stands out is the Tech Sector selling - HUGE.

As many of you know, I've been successfully testing a deep-in-the-money covered call /defensive investing strategy for over two years, achieving at least historic market returns (10-12 %); at last, in the past two weeks 2 conservative institutions have validated my plan - Schwab's top option guru - in an investment letter; and Nuveen,,with 3 closed-end funds. For more on the strategy, please see brentleonard.com.

Here are the Sentiment numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	11951	12151	14093	6626
Nasdaq:	2643	2732	2861	1114
S&P 500:	1270	1300	1561	683
CBOE Eq. put/call:	86	69	96-10/08	46-1/03
VIX:	18.9	18.0	90	8.8
McClellan Osc:	(68)	(29)	108	(123)
McClellan Sum:	181	458	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	n/a	n/a	63	22.21
InvestorsIntel.Bear:	n/a	n/a	54.4	16
AAII Bull:	24.4	30.2	n/a	n/a
AAII Bear:	47.7	33.4	n/a	n/a
US Equity-1 week lag	n/a	(1.0B)
Money Market Flows	15.9B	(21.9B)
Baltic Dry Index:	1418	1489	11700	663
Bullish %:	64	72	89	2
Insider Corporate Sellers:	48:1	44:1	235:1	2.4:1

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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THE MARKET- OUT OF INTENSIVE CARE;