MAYDAY,M'AIDEZ:

Help! Can anyone stop the downward onslaught? April ended with an Income Tax-paying, profit-taking, tape-painting window-dressing cavalcade. At least the sellers stopped, although Volume shows the buyers haven't shown up yet.So far, the most extreme Sentiment reading this week was the Public to Specialist shorting - a huge record-setting 3.67 ratio (if that number is to be believed)- previous 5 year high was 2.57 in August of '04, a Buy point at an Inverse Head & Shoulders re-accumulation pattern (the Head). Sometimes even the IBD can put up a bad number - we'll have to see if other Indicators similarly support this event.
The Investors Intelligence survey shows a recent record high of Bears at 29.7, and odd-lot short sales jumped up, confirming the above Specialist ratio. Another recent record is the U. of Michigan Confidence at 87.7, lowest since Sept. of '03. At 51, the Bullish per cent of stocks on a Buy signal is down 35% from its Dec.31 high - a market top. The AAII (shoeclerks) Bull/Bear survey is inverted - rare, but welcome to bulls - at 29.8/34.7.
May used to be a very good month, at least for the Dow 30 which are large-cap, dividend-paying stocks. Let's hope for at least a short-term rally here as first-of-the-month money comes 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

Subscribe in a reader

MAYDAY,M'AIDEZ: