LAZY DAYS OF SUMMER

Monday, June 28 –Iraq Handover Day. Now the question is Interest Rates – up, but how fast? U. of Michigan consumer sentiment Index on interest-rate expectations hit a record 85% in May, says Merrill’s David Rosenberg – these levels usually occur at the end of rate hikes and Bond Bear markets. Other contrarian signals are the flat Basic Materials/Gold markets recently, if Inflation is a factor. Greenspan’s “measured” moves cannot afford to disturb the huge mortgage leverage of GSEs like FannieMae and other carry trade institutions that have loaned short and leveraged longer (in Trillions).
Indicators still appear neutral in this low-Volume, apprehensive market, with the VXN (Nasdaq's VIX) at a record low sub-19 and the VIX touching below 14.. Weekly Volume Indicators were slightly impacted by the rebalancing of the 21 Russell Indices last Friday,as the Nasdaq Volume to NYSE Volume ratio spiked up to 137%.

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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LAZY DAYS OF SUMMER

Downtrend

Hard to believe after hearing and reading every pundit/expert on WS Weeks (2),NBR, CNBC, Barron's expound Bullishly, that we have been in a downtrend since the first full week of 2000.With lower highs and lower lows into the Head and Shoulder Bottom of early '02, the minimum projection of that formation was 1850 points on top of the Neckline of 9050 (weekly charts), or 10,900. We rose 1700 pts.to the Mar.'02 high Resistance level, then resumed an Intermediate downtrend which we are still in until proven otherwise (taking out 10,750). Most Sentiment Indicators are neutral, coming off Bullish (negative for market and rightly so)levels, except for the Investor's Intelligence which shows Bulls at 55% and Bears only 17.5%, an extreme.

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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Downtrend

WEEKLY INDICATORS: JUNE 12

Most Indicators are in the Neutral range this week: CBOE put/call ratio slightly Bullish at 74, and the AAII market letter survey jumped from 33% to 55% Bulls, moving negatively. Strengthening A/D ratio and New Highs ratio reflect recent runup, now correcting from overbought during Reagan week.

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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WEEKLY INDICATORS: JUNE 12

WEEKLY SENTIMENT UPDATES:

18TH C.playwright Nicholas de Chamfort said it best:" Public Opinion is the worst of all opinions."
One of the few exceptions to Contrary Opinion has been Buying/Selling by Corporate Executives over the years. Since they are purportedly the "experts" of their companies and Industry Groups, they should be the first to see trouble down the road. For the last 2 years they have been extreme Sellers across the board, but have now switched to the Buy side, per Michael Santoli of Barron's. Only the fullness of time will validate their actions!
The current accepted wisdom of the majority of gurus and pundits is that Healthcare stocks will rule this decade and that dividend-paying large-cap stocks (mainly cyclicals) will dominate whatever market we find ourselves in.

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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WEEKLY SENTIMENT UPDATES:

Favorable Industry Groups when rates rise

According to Ned Davis Research, when the 30-year Treasury Bond yield rises, as we assume it will shortly, Technology hardware and equipment have historically risen 20%, Software and Services up 15% and Energy 14%. Worst groups include Utilities, down 13% Banking, Insurance and other Financials @ 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

Subscribe in a reader

Favorable Industry Groups when rates rise