QUARTERLY CLEANUP:

Last week's Contrary signals included a sharp rise in Public/NYSE Specialist shorting to over 5.5, a level which precipitated rallies in early January and mid February this year, peaking 2/24 at 5.97 (per IBD).
Odd lot shorting also rose majorly through the week of March 10 (around 15%). The ISE call/put ratio jumped sharply up to 175, the level at Jan. and Feb.s' month end decline, although I view breaching the 200 level more serious. The CBOE put/call is still rather high/Bullish, at 63.
The ratio-adjusted McClellan Oscillator is buzzing around the zero line, but the Summation is still in the downtrend I mentioned earlier (at 552), showing the tendency to stay in a falling mode when coming off its highs (as it did last Spring and Summer).
The Bullish per cent is just below 70, needing to drop below 50 for another sustained rally.
Finally, The Panic/Euphoria Index (a Master Indicator) broke up through the surface to -0.28, the least negative since the July top.This does not bode well for the markets.

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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QUARTERLY CLEANUP:

RALLY MADNESS!:

Talk about a Wall of Worry! The mid-East is falling apart with Iran's nukes, Iraq's uncivil war, Israel now has Avian Flu, Bush and his policies have the lowest ratings yet, we're ending the Green semi-annual market cycle of plus returns, and even the planets are aligning against us - similar to 1929 and the 1989 Real Estate bust.
After 15 rate hikes and an extended bull rally, the Economy seems healthy despite the enormous deficits we pay interest on (mostly to ourselves), at least for now.Yet the triple-witching expiry ends the week with 5-year record highs. NYSE Margin debt, at $232B, is almost back to the 2000 record level of $275, mutual fund cash (per Ned Davis) is below 4% (a different number than IBD posts).
The Indicators still seem in a rut except for a couple outliers: The Advance/Decline was very positive (net 1941), as were the New Highs/New Lows, with REITs displacing Medical stocks from first place.
Inv.Intell. Bears moved up to 33%, as did the AAII. However, Market Vane's survey Bulls climbed to 70% and the Barrons Panic/Euphoria Master Indicator pulled up to the -.30 line, out of the Panic area, for only the 3rd time in many months.
Still no consensus of either extreme to act upon, just plenty of onemy out there. The number of millionaires in the U.S. is up 50% in the past 2 years, and the oil producers aren't exactly hurting either. Wyckoff might call this an UpThrust After Distribution.

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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RALLY MADNESS!:

BEWARE THE IDES OF MARCH:

Barron's magazine reports that Henry Weingarten of the Astrologers Fund is warning of impending Doom in the markets from now until June, with the Dow falling below 10,000 again and the Nasdaw down 10% below 2000; similarly, a French thinktank is calling for an 80% probability that after March 20 a significant political crisis will occur (what else is new?).
Henry W says the planets are in similar states as the Real Estate crisis in 1989 and the 1929 stock crash.
Up until now, however, ennui is the byword, with the tight Trading Range in all 3 Indices (large caps stronger than OTC stocks) being reflected in most Sentiment Indicators. The Demand side (Bullish) is supported with Survey Bears rising over 30 (II and AAII) and Bulls' complacency falling into the low 40s; CBOE puts are at a high 66 over calls. Finally, the Rydex Nova/Ursa fund ratio slipped to a nearterm low of 17 ( the lower the better, for Bulls).
The Supply side (Bears) has less evidence of conviction with shorting abating (Public vs. Specialist), and the Panic/Euphoria Master Indicator rising to -0.39, still under water to Sea level of -.30 bounding the Panic level.

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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BEWARE THE IDES OF MARCH:

IN LIKE A LION:

Usually one would expect up markets at the first part of a month when IRA contributions, Income Tax refunds, etc. flow in. Although most of the Sentiment Indicators have been boringly regressing to the mean, reflecting the steady, albeit rising, Trading Range we've been in below the 2000 all time highs on the Dow 30, a couple of longer term ones have appeared on my radar: the Bullish Per Cent, now at 67, usually falls materially after a top, as does the A/D based McClellan Summation Index, now at a high 665. Funnily enough, the NYSE Adv vs. Decls were dead even last week at 1751 to 1753, although that closed-end fund-ridden entity had 508 New Highs vs. only 71 New Lows.
But before this semi-annual "Bull" period is done there is hope for a rally with the Investors' Intelligence surveys starting to look oversold as it contracts like the Bollinger Bands, hopefully even inverting - it is now 42.6 Bulls to 30.8 with the AAII similar.
Another Bearish extreme is the Nasdaq to NYSE Volume, critically high at 153 (speculative). Recently I've been keeping track of the SPX traders' commitment but so far haven't enough sample data to find it revelatory or consistently reliable.
Only a couple of signals made major percentage moves, to the Bullish camp, they being the Barron's Panic/Euphoria Index, rising from the depths of -0.66 to -0.51; likewise, the Public shorting vis a vis Specialists, fell off from 5.97 to 4.16, nearly a third. These seem to echo the increased volatility recently imposed by the Hedge Fund crew, trying to make money after a dismal '05.

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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IN LIKE A LION: