HEDGE-EMONY:

The ability of hedge funds to control the market!
AMG Data services, which reports mutual funds money flows, cites that in the last 2 weeks, these figures emerge: June 14 - Inflows were $4B, but without ETFs- over $5B in OUTFLOWS; June 21: Outflows were over $5B; without ETFs - only $600M. Talk about zigging and zagging!With the mostly upward retracement (rally) of the past few days, many Sentiment Indicators ameliorated their drastic levels, including the McClellan Oscillator, which is back to minus 11 after breaching the -50 Support area; however, the Summation is below -500 (at 509) about where it was last October.
Both the CBOE put/call and VIX have backed off their highs-still in a positive area for the Bulls, but the ISE roared back to complacency at 133 (Monday's level was 200, not a good sign). The Bullish per cent slipped below 50 to 49, about where it was last August (46). Market surveys also show lots of pessimism with the I.I. finally lowering to a tie of the Bulls and Bears at 35.6 each, with the AAII still inverted at 34.4 vs. 41.6.
Finally, the Panic Index in Barrons' slipped farther to -0.66, deep in the Panic zone. The preponderance of these Indicators are suggesting a rally soon -even in a Bearish environment. History shows a few down days after June's Triple witching option and futures expiry, with a 9-day rally through the July 4th holiday. With the Fed's 100% expectation of hiking rates, bear in mind that the average market move between the last rate HIKE and the first CUT is a minus 7% - contrary to conventional wisdom; also remember that this is a small sampling of polling, and odds of it being exactly 7% are miniscule!

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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HEDGE-EMONY:

CMJ, OR CRITICAL MARKET JUNCTURE:

With the cathartic volatility of quadruple-witching expirations, there appears to be a Democratic/Republican-type of polarization on whether we have bottomed or not. The choices, offered by respected veteran analysts on both sides, seem to be either much farther down to go ( in this ugly month of an ugly quarter of an ugly 4th year); or stabilize at current levels which display the DJIA at its 200-day MA, and the SPX just below, while the weak Nasdaq is well below but at longterm horizontal support.
Many Sentiment Indicators argue for the latter - building a base, although whether it's to be a re-Distribution phase or Accumulation phase is yet TBD. Firstly, the Barron's Panic/Euphoric Index hit - 0.63, a prior launching level (see Feb. and last Oct.), and the VIX climbed to a recent record of 24 before retracing down to 17.2. It is doubtful that it will return to its recent range of 11-12 of the last several months.
The I.I., or Investor's Intelligence survey of Bulls and Bears continued their converging at 38.7% and 34.4 respectively - also a recent record that is Bullish. Even the Elliotticians weigh in with an A=C correction of @550 declining points each on the Dow 30. Lowry's Report's famous 90% predominance in both directions last week also gives credence to a stoppage of bloodletting, at least temporarily (weekly New highs/lows on the NYSE were 44 vs. 458).
Although the CBOE Equity put/call ratio backed off slightly with options expiration, the ISEE call/put hit a record low of 66 -very bullish for a contrarian. Like the major indices, the McClellan Oscillator was basically unchanged from last week (after a rough ride), however the Summation, at -407, is near the October '05 low. And at 48%, the Bullish per cent of stocks on Buy signals are finally in the range of previous bottoms.
It's been a long while since we've seen such a consensus of negativity like this, so in my view, left to investors and not Nations, we should have reached at least a temporary stoppage of declines.

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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CMJ, OR CRITICAL MARKET JUNCTURE:

1,000 POINTS OF RED:

That's what the Dow 30 seems to be losing this summer! Yet most of those investors who give us our Sentiment readings seem unfazed, judging from last week.
Several numbers, such as CBOE's put/call ratio, actually dropped - as did the ISE obverse call/put, and the McClellan Summation Index. The Nova/Ursa ratio reached a new low of 10, indicating that investors are rushing into the Bull fund (?), and the AAII bears actually dropped 5 points, although it is still inverted. And these numbers are usually gathered by Wednesday, the day before that 200 pt. 1-day reversal upward which otherwise distorted an ugly week.
Falling slightly, but not to oversold levels, were the Panic/Euphoria Index ( to -0.53), and the I.I. Bull/Bear spread narrowed again to under 10 - at 40 and 31.5.
The big, positive changes came from the McClellan Oscillator, dropping from overbot 50 the week before to a minus 15 (Monday saw it drop even more, to -40, nearing a normal bottoming area. Bullish per cent dropped to 51, also near a reversal point (although Oct. '04 saw it down to 11%). The most spectacular change was the Public/NYSE Specialist shorting, reaching a record high of 7.26, blowing away the old high of 6.23. Must be those hedge fund guys.

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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1,000 POINTS OF RED:

OH, RALLY?:

As ugly as today's DJIA is, at down 140 (and also the past 2 week-openers - last Monday being a holiday), there is cause for Hope, at least for a snapback rally nearterm. Not only have the DJIA and SPX found Support at horizontal trendlines AND 200-day MAs - the Nasdaq is hopelessly below everything- but several Sentiment Indicators are finally screaming BUYS:
From the top down, the CBOE Equity put/call ratio ended the week with a recent record high of 73, while its cousin, the ISEE call/put ratio ended at 109, after breaking 1.0 for the first time since October of '04. That was when the CBOE hit 79!
Market breadth was also hopeful, with the A/D very strong on the NYSE, a healthy divergence, and the NAZ dead even on new highs vs. lows.
In newsletter surveys, the Inv.Intell. narrowed its spread of Bulls vs. Bears to 42 vs. 30, while the inverted AAII ratio widened its with 50 Bears and 30 Bulls - dramatic!
The Public to NYSE Specialist shorting rose to a near record 5.75 number.

Still warning of contrary action is the McClellan Oscillator, which over-exuberantly ran to +50, often a topping point. And the Rydex fund investors are asleep, dead, or extremely wise, holding at their record low 12 in the Nova/Ursa ratio. Finally, the Bullish Per Cent chart rose slightly, but not with a 3-box PNF BU Y reversal signal as of yet.

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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OH, RALLY?: