THE PAUSE THAT REFRESHES:

After a 4-month straightup Dow, it seems like we may at least go sideways, at least until after the elections next week. Whether the excess liquiduty that has confounded seasonal history came from lower oil/gas, a renewal of Japan's carry-trade, or corporate share buybacks, it seems the housing crash has not hurt stocks, as of yet.
With the levelling off, some of the excessive sentiment readings have backed off, such as the CBOE put/call ratio, VIX, Panic/ Euphoria,Specialist shorts,and AAII survey.Still indicating a potential downturn are the McClellan Summation, now crossing over 1000, Bullish per cent at a high of 74, and finally, the Nova/Ursa waking up from its single-digit bullishness up to the 15 mark it saw at May's top. Here are the numbers:

Mktsentiment. 10/27/2006......5Yr.HI........ LOW

DJIA 12090...........11577...........7286
Nasdaq 2350............2243............1114
S&P500 1377............1325............776
CBOE Equity put/call 61.............87-5/04........46-1/03

VIX 10.8.........44 9/02........10.3-7/05

ISEE-call/put 161...........299-12/04.......82-4/02
(>200/Bearish)

McClel Osc.(+75/-100) 7...............91-5/04.........(81)-5/04
McClelSum.(+750/-1000) 1005...........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 52.7...........62.9-12/04......35-6/06
Bear:43.2/16.1--5yrs 30.1.........38.2-3/03.......16-6/03

AAII-Bull/Bear 52.2/30.4.....n/a n/a
MarketVane Bulls 73......... 73..............24

Barron's Panic/
Euphoric Master Idx -0.57........-0.24 4/06.....-0.75 11/05

Bullish%- 74...............88 -2/04...... 46-8/04

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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THE PAUSE THAT REFRESHES:

MEA CULPA:

As evident, I was unable to update this blog this week due to my vacation, sans my heavy laptop. I was able to retrieve the data, as viewed below.
The October Surprise continues to defy traditional October selloffs (word is many funds did it early this year); and so the rubber band stretches further. NYSE new his/lows were outrageous at 650 to 24, with the NAZ a weaker copy; the McClellan Summation also pushes the envelope at 935.
Also nearing optimal levels are the AAII and Invest.Intell. surveys (see below), and the Bullish per cent.Here is the Matrix:
Mktsentiment.blogspot 10/20/2006......5Yr.HI........ LOW

DJIA.................................. 12002...........11577...........7286
Nasdaq.................................. 2342............2243............1114
S&P500............................. 1368............1325............776
CBOE Equity
ratio ...................................60.............87-5/04........46-1/03
VIX ................................10.63.........44 9/02........10.3-7/05
ISEE-call/put ................. 146...........299-12/04.......82-4/02(>200/Bearish)
McClel Osc.(+75/-100) ...9...............91-5/04.........(81)-5/04
McClelSum.(+750/-1000) 935............1568-6/03.......(726)-5/04
Newsletter Surveys:
Inv.Intel -Bull:................... 52.2...........62.9-12/04......35-6/06
Bear:................................ 30.........38.2-3/03.......16-6/03
AAII-Bull/Bear 54.2/29.8.....n/a n/a
MarketVane Bulls 72......... 73..............24
Barron's Panic/Euphoric -0.65........-0.24 4/06.....-0.75 11/05
Bullish%- ........................ 72...............88 -2/04...... 46-8/04

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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MEA CULPA:

TO THE MOON, ALICE:

So when does this parabolic upthrust end? We all know the bricks in the Wall of Worry -interest rates, Iraq, economy, housing. In stark contrast to the seasonal normal, the markets have ignored history (so far), and as if there were a deus ex machina lifting all boats ( Hedge funds, ETFs -whose inflows were $6B last week, although without them equity flows were negative-, or the Republicans?).
NYSE new highs to lows were 558 to 25, and my own cumulative A/D reached all-time highs of 83,805. Still, NYSE Volume remains between 1.2B and 1.5B shares, not at all heavy. Although the DJIA is making new highs (although well off its 2000 inflation-adjusted highs) other Indices, such as the NYSE and Nasdaq comps are bumping up on last April/May's highs, a Resistance area.
As for the Sentiment readings, they're as wacky as I've ever seen them. Most show evidence of the past strong runup, but have entered the "toppy" zone - such as the McClellan Summation Index at 835; also, the Bullish per cent at 71 nears previous recent tops.
The Bull/Bear spread for the Investors Intelligence has gone from 4 in August to 22, at 52/30; likewise the AAII flip-flopped from an inverse 37/46 to 49/37, as the Market Vane climbs to a toppy 72. Conversely, the Citi Panic/Euphoria master indicator is Bullish at -0.67, as are the Specialist to Public shorts and short interest.
Here are the indicators:

Mktsentiment.blogspot 10/13/2006 4Yr.HI LOW
DJIA 11960 11577 7286
Nasdaq 2357 2243 1114
S&P500 1365 1325 776

CBOE Equity
put/call ratio 60 87-5/04 46-1/03

VIX 10.75 44 9/02 10.3-7/05

ISEE-call/put 147 9-12/04 82-4/02
(>200/Bearish)

McClel Osc.(+75/-100) 24 91-5/04 (81)-5/04
McClelSum.(+750/-1000) 835 1568-6/03 (726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 52.2 62.9-12/04 35-6/06
Bear:43.2/16.1--5yrs 30.4 38.2-3/03 16-6/03

AAII-Bull/Bear 49/37.8 n/a n/a
MarketVane Bulls 72 73 24

Barron's Panic/
Euphoric Master Idx -0.67 -0.24 4/06 -0.75 11/05

Bullish%- 71 88 -2/04 46-8/04

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

TO THE MOON, ALICE:

CONVENTIONAL STUPIDITY:

One of the most reliable technical signals has acceded to the media curse - that of September being the cruelest month for the market and, for 50 years, October in the 4-year Presidential cycle always does a V-Spike selloff before rallying into yearend.
Somebody forgot to tell the markets, which have gone straight up since August (maybe the spike came early this year -during the summer).
Sentiment Indicators on the whole do not show signs of an immediate turndown, although it is always prudent to be cautious this time of year, as Mutual Funds begin their yearly adjustments.
The Dow 30 keeps making new highs ( although no other Indices are), which means buy-and-holders of 7 years ago are finally even again, except for Inflation. Not so for the four-letter words/stocks! They're not even halfway back.
Last week's breadth, as measured by new highs and Advance/Declines is getting stronger. The Panic/Euphoria index is very bearish (great for the markets) at -0.68, and the AAII Bull/Bear survey numbers actually inverted:37.8 vs. 46.7.
The Investor's Intell. and Market Vane, however, tell a different story. Both the Bullish per cent (still on a strong Buy signal) and the Nasdaq Comp are approaching the top of their range from last winter. The McClellan Summation is also quite high.

Mktsentiment.blogspot 10/06/2006 ..... 4Yr.HI ...... LOW
DJIA 11850 11577 7286
Nasdaq 2299 2243 1114
S&P500 1349 1325 776

CBOE Equity put/call ratio 66 87-5/04 46-1/03

VIX 11.5 44 9/02 10.3-7/05

ISEE-call/put 110 9-12/04 82-4/02
(>200/Bearish)

McClel Osc.(+75/-100) 6 91-5/04 (81)-5/04
McClelSum.(+750/-1000) 768 1568-6/03 (726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 49.5 62.9-12/04 35-6/06
Bear:43.2/16.1--5yrs 33.3 38.2-3/03 16-6/03

AAII-Bull/Bear 37.8/46.7 n/a n/a
MarketVane Bulls 70 73 24

Barron's Panic/
Euphoric Master Idx -0.68 -0.24 4/06 -0.75 11/05

Bullish%- 68 88 -2/04 46-8/04

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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CONVENTIONAL STUPIDITY:

BLAH,BLAH,BLAH:

Here we are on the first day of the new week, month, and quarter - even a new fiscal year for the Federal Government, and we flatline the market. The market is usually up 74% of the time on the first day of the month, and our newly high DJIA cannot even close on the plus side.
Now that Sept. defied Conventional Wisdom by rallying into the EOQ, does that invert all other rationale, including the 4-year cycle?
With a new high the Bulls are returning, in the form of UBS Confidence rising from 53% to 74; the AAII gap widened further (with the Inv.Intell. unchanged); not yet Bearish are the put/call ratios, Bullish per cent -63- , and Barron's Panic indicator, while the Trannies and Utils are not confirming the Dow Industrials, nor are most of the other indices ( the NAZ hasn't even come back to 50% of its 5000 mark).
Here are the Indicators as we enter the final quarter:

Mktsentiment.blogspot 9/27/2006 4Yr.HI LOW
DJIA 11679 11577 7286
Nasdaq 2258 2243 1114
S&P500 1335 1325 776

CBOE Equity
put/call ratio 66 87-5/04 46-1/03

VIX 12. 44 9/02 10.3-7/05

ISEE-call/put 80 9-12/04 82-4/02
(>200/Bearish)

McClel Osc.(+75/-100) -2 91-5/04 (81)-5/04
McClelSum.(+750/-1000) 739 1568-6/03 (726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 47.4 62.9-12/04 35-6/06
Bear:43.2/16.1--5yrs 33.7 38.2-3/03 16-6/03

AAII-Bull/Bear 51.3 /32.9 n/a n/a
MarketVane Bulls 71 73 24

Barron's Panic/
Euphoric Master Idx -0.64 -0.24 4/06 -0.75 11/05

Bullish%- 63 88 -2/04 46-8/04

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

BLAH,BLAH,BLAH: