JANUARY DEFECT:

Even with Monday's big runup of 80 points at the open (reasons being the successful Iraq election -fundamental- and the last day of the month -quantitative- and the aforementioned bounce off the 10,400 Dow Support and 1163 SPX line), we still needed another 300 points today to finish with an UP January ( 40 more on the SPX 500). Still, although the January Barometer has a fairly good track record in up years, not all down Januarys result in a down year!
Sentiment Indicators are echoing the recent bottoming into sideways action (which could result in Accumulation or Redistribution) with so-so levels, except for a couple outliers: for some reason Mutual Fund Cash dropped a huge 10% from 5.5% to 5%, and the AAII survey's Bears again crossed up to 36% vs the Bulls 26%!. All others have fallen into normal range.

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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JANUARY DEFECT: