NOWHERE TO NOW HERE:

The DJIA is less than 100 points from where it entered the latest Trading Range last June, and has had a wild ride in the form of a Megaphone - not a pleasant thought if it turns out to be distribution rather than re-accumulation!
After an ugly December sentiment readings have regressed to the mean thanks to a Santa rally (so far). The put/call ratio and VIX have quieted down; the A/D line and McClellans are neutralized, although last week's New Highs to New Lows were a 1:6 with year-end selling.
Bull/bear surveys, reported Wednesday, were leaning toward bullish complacency, although the best indicator - the AAII - inverted to 36/47, which is always welcome. Insider selling and Public shorting dropped precipitously, and the Bullish per cent - stocks on a buy signal - actually dropped more than its 3 box (6%) stop, giving a SELL signal.
All the above calls for tic-tacs for the bad breadth!
Finally, AMG reports huge outflows - $15B - from mutual funds, but an equal amount of inflows from ETFs.
Here is the data:

Mktsentiment. 12/21/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13450………..13339………..14093..............7286
Nasdaq………. 2692………….2635…………2810.............1114
S&P500…….. 1484………….1467…………1561………..776
CBOE Eq. put/call …60……………84……………91-8/07…..........46-1/03

VIX ………. 18.5………….23.3…………….44.. 9/02 bu........10.0-7/05 br
Intrade.com-DJIA-atm/
Recession% 57/42…………50/47……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………16…………..-17……………91-5/04 br......(81)-5/04bu
McClelSum………-415…………..-324…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…56.5………….53.3………..62.9-12/04br......35-6/06bu
Bear:………… 22.4………….25.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……35.9/47.2…….47.6/35.7……..n/a n/a
MarketVane Bulls…56……………58…………. 74br..............24bu
UBS investor confidence.50……….44!nl ………178……………44
(monthly change)
IBD: Short Interest- …8.87………..8.72….……8.95………. 4.0
Public/NYSE Spec.-…10………….14.7…..……18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………52/32………43.3/33.3
Bullish%- ………46……………52……….…88 -2/04br.....36bu
*Insider corporate sellers.11:1……22:1………..97…………..6
Sectors: Most Buyers: Finance
Most Sellers: Tech, Finance

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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NOWHERE TO NOW HERE:

DOW(n) JONES AVERAGES:

Or, as the limbo dancers dare: "How Low Can You Go?". Thanks to the unanimity of the talking (and writing) heads calling for a huge December rally, we've seen a depressing continuation of the Trading Range which started last June.
Newsletter surveys (which are out on Wednesday - at the start of the recent decline) seem to be buying into the rally. Fortunately, a couple of extremes are boding favorably for a Santa rally (which normally occurs between Xmas and New Year's): the CBOE Equity put/call ratio shot up to 84 last week, just off its '04 high of 87; the UBS Investor confidence (a monthly figure) is way low at 44. Cash is exiting Mutual Funds, but zooming into ETFs, while money market inflows abated considerably.
Finally, Insider selling action shot up to 22:1, with Healthcare the new leader.
Here are the stats:
Mktsentiment. 12/14/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13339………..13625………..14093..............7286
Nasdaq………. 2635………….2706…………2810.............1114
S&P500…….. 1467…………1504…………1561………..776
CBOE Eq. put/call …84……………65……………91…..........46-1/03

VIX ………. 23.3…………20.8…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 47……………44……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-17…………58……………91-5/04.........(81)-5/04
McClelSum………-324…………..-439…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…53.3…………49.4………..62.9-12/04......35-6/06
Bear:………… 25.6…………27.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……47.6/35.7…….40.7/39.8……..n/a n/a
MarketVane Bulls…58……………56…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.72…………8.57….……8.95………. 4.0
Public/NYSE Spec.-…14.7………….14…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………51.7/24.1……..48.3/27.6
Bullish%- ………52………………53……….…88 -2/04...... 36
*Insider corporate sellers.22:1………14:1
Sectors: Most Buyers: Finance
Most Sellers: Healthcare

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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DOW(n) JONES AVERAGES:

REST STOP:

After a stealth 1,000 point rally on the DJIA ( 200 on Nasdaq Comp., and 100 on SPX) the past two weeks, the Fed's imminent decision might be a good time to stop and reload for the Santa Claus rally at yearend. The new highs in yield-providing Utilities bodes well for the market, so says TA John Roque.
With several indicators coming off last week's Bullish (read oversold) extremes - such as put/call ratios, surveys, the new Recession expectation - the McClellan Oscillator at 58 is overbought short term.
Longer term, Paul Desmond of Lowry's thinks the thin breadth of A/D, stocks below MAs, and weak NH/NLows is Bearish.
Finally, Money Market inflows were at a high $48B level - let's hope there are no credit problems with these instruments!

Here is the weekly data:

Mktsentiment. 12/07/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13625………..13371………..14093..............7286
Nasdaq………. 2706…………2660…………2810.............1114
S&P500…….. 1504…………1481…………1561………..776
CBOE Eq. put/call …65…………..73……………91…..........46-1/03

VIX ………. 20.8…………22.9…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 44……………47……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………58…………..40……………91-5/04.........(81)-5/04
McClelSum………-439………….-644…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…49.4…………47.3………..62.9-12/04......35-6/06
Bear:………… 27.6…………29………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……40.7/39.8…….28.6/56.1……..n/a n/a
MarketVane Bulls…56……………52…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.57…………8.11….……8.95………. 4.0
Public/NYSE Spec.-…14……………14.2…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………51.7/24.1……..48.3/27.6
Bullish%- ………53………………47Buy……….…88 -2/04...... 36
*Insider corporate sellers.14:1………..9:1
Sectors: Most Buyers: Finance
Most Sellers: Tech ,Energy

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

REST STOP:

THE WISDOM OF CROWDS:

As I looked back to a book review I did over a year ago on Surowiecki's best-seller I was amazed at the similar concepts to the one I just did on The Black Swan, about crowds such as the Millionair "Lifeline" and the Iowa Election Market, are more accurate than experts. Ironically, this seems diametrically opposite to Contrary Opinion of Mackay, Humphrey Neil, et.al., but somehow they coexist effectively.
I mention this because a new Indicator has come up on the radar - from www.intrade.com, one that predicts the odds of a Recession, which contrarily predicts the stock market quite effectively. With a high of 59% (Bullish for stocks) and a low of 31%, we are at 47%.
Extremes from last week include several signals nearing their 5-year highs (or lows) - Public to Specialist shorting at 14 (vs. 18 high); the UBS Investor Optimism breached its low at 44, down from 70 the prior week; the AAII Bears reached 56, with the I.I. (Invest.Intell.) at 29. And the Bullish % was up 10 points, a Buy signal off of a reversal low of 37.
Short term negatives for stocks include a +40 on the McClellan Oscillator, very weak NH/NLs, and a weakening of the CBOE put/call and VIX ratios.
Please see below:
Mktsentiment. 11/30/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13371……….12980………..14093..............7286
Nasdaq………. 2660…………2596…………2810.............1114
S&P500…….. 1561…………1440…………1561………..776
CBOE Eq. put/call …60……………73……………91…..........46-1/03

VIX ………. 22.9………….25.6…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 47……………46 ……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………40…………..-28……………91-5/04.........(81)-5/04
McClelSum………-644……………-663…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…47.3………...47.9………..62.9-12/04......35-6/06
Bear:………… 29………….26.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……28.6/56.1…….25.6/52.7……..n/a n/a
MarketVane Bulls…52…………….54…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.11……….8.42….……8.95………. 4.0
Public/NYSE Spec.-…14.2………..11.96…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………48.3/27.6……57.1/28.6
Bullish%- ………47B…………….37……….…88 -2/04...... 36
*Insider corporate sellers.9:1…………8:1
Sectors: Most Buyers: Finance, Consumer Services
Most Sellers: Tech , Healthcare

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 WISDOM OF CROWDS:

CMJ: CRITICAL MARKET JUNCTURE:

Both in cyclical timing and indices' lows, if we don't start a rally in the next few days, and continue down, all hell will break loose. Many sentiment indicators are at oversold extremes, where they could break, not bend.
The ISEE call/put(newly revised to just an inadequate hourly quote), similar to the CBOE Equity put/call ratio , has been deleted in favor of a new one - the Odds of Recession for '08, supplied by Intrade.com. A contrary indicator, 59% odds of a Recession is a market bottom, while 31% calls for a market top - we are currently at 46%.
Not only are the indices at strong support levels, the New Lows to New High ratios are double-digit; the McClellan Summation is negative 663, AAII Bears at 52%, with other surveys agreeing.
Finally, the all-important Bullish per cent is at a low 37% - an oversold bottom.
Here are the stats:
Mktsentiment. 11/23/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12980……….13177………..14093..............7286
Nasdaq………. 2596…………2637…………2810.............1114
S&P500…….. 1440…………1459…………1561………..776
CBOE Eq. put/call …73……………76……………91…..........46-1/03

VIX ………. 25.6……….25.5…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 46 ………….n/a……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-28…………-54……………91-5/04.........(81)-5/04
McClelSum………-663…………..-417…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….47.9………..51.1………..62.9-12/04......35-6/06
Bear:………… 26.6………..26.7………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……25.6/52.7……33/49.5……..n/a n/a
MarketVane Bulls…54……………58…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.42………..8.36….……8.95………. 4.0
Public/NYSE Spec.-…11.96……….10.34…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………57.1/28.6……on vaca…….
Bullish%- ………37……………40……….…88 -2/04...... 36
*Insider corporate sellers.8:1…….. 7:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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

CMJ: CRITICAL MARKET JUNCTURE:

AND THE HITS JUST KEEP ON COMING:

An optimist would opine that the deeper this surge goes, the larger the ensuing rally. Mark Liebovit's quite reliable market model calls for a December rally, as does Helen Meisner (Street.com's technician) with 30-day MAs of both Volume and A/D lines.
Several Sentiment Indicators are also in oversold areas -but could always go lower. As the DJIA tests its August and recent lows near 13,000 (if it breaks down it confirms the Dow Theory of Transport confirmation), Bullish extremes exist in the CBOE put/call ratio (76) and the Bears of Inv.Intell. at 26.5 - AAII Bears are at 49% ; the McClellan Osc. is still below -50 with its concomitant Summation at -417; New Lows to Highs are 7:1 on the big board, public shorting is double digits, and the mutual funders (-$10B outflows) are running for the money markets.
A final sign is the legal Insider Selling at only 7:1, still in Tech and healthcare, while largest Buying is in Finance and Energy. See below:
Mktsentiment. 11/16/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13177……….13042………..14093..............7286
Nasdaq………. 2637…………2627…………2810.............1114
S&P500…….. 1459…………1453…………1561………..776
CBOE Eq. put/call …76……………73……………91…..........46-1/03

VIX ………. 25.5…………28.5…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 141…………156……………246………..118
All Equities (ETF)
McClel Osc…………-54…………-70……………91-5/04.........(81)-5/04
McClelSum………-417………….-155…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….51.1…………54.5………..62.9-12/04......35-6/06
Bear:………… 26.7…………22.2………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……33/49.5………36.2/51.4……..n/a n/a
MarketVane Bulls…58…………….63…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.36………8.44….……8.95………. 4.0
Public/NYSE Spec.-…10.34……..11.86…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………on vaca……34.4/37.5…….
Bullish%- ………40……………54……….…88 -2/04...... 46-8/04
*Insider corporate sellers. 7:1…….13:1….
Sectors: Most Buyers: Finance, Energy
Most Sellers: Tech , Healthcare

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

AND THE HITS JUST KEEP ON COMING:

Apres le deluge:

This week's extremes in Sentiment readings include the McClellan Oscillator at -70, the inverted bull/bear ratio of the AAII surveys, and the CBOE Equity put/call ratio of 73 - all strong signs of a short term cessation of downside price action. Public shorting was high, as was short interest. Money market inflows were huge at 63B for the week:
Mktsentiment. 11/9/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13042………..13595………..14093..............7286
Nasdaq………. 2627…………2810………….2810.............1114
S&P500…….. 1453………….1509…………1561………..776
CBOE Eq. put/call …73……………63……………91…..........46-1/03

VIX ………. 28.5………….23…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 156………….165……………246………..118
All Equities (ETF)
McClel Osc…………-70…………-24………91-5/04.........(81)-5/04
McClelSum………-155…………..112…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….54.5………… 53.8………..62.9-12/04......35-6/06
Bear:………… 22.2…………23.1………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……36.2/51.4…….44.7/36.5……..n/a n/a
MarketVane Bulls…63……………64…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.44………8.63….……8.95………. 4.0
Public/NYSE Spec.-…11.86………8.31…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………34.4/37.5…….44.8/37.9
Bullish%- ………54………….62……….…88 -2/04...... 46-8/04
*Insider corporate sellers. 13:1…...26:1….
Sectors: Most Buyers: Finance (1/3 of total 10 sectors)
Most Sellers: Tech , Healthcare

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

Apres le deluge:

TRADING PLACES:

Despite being in the most volatile time of year (September-October) we seem to be stuck in a trading range bounded by less than 1,000 points on the DJIA. Most Sentiment Indicators seem to be stuck in midrange, and the extremes fluctuate at both ends.
Money Markets went from record Inflows of $36B the prior week to $33B record Outflows last week. ETFs saw a rather high level of $8B Inflows after weeks of selling. Insider trading by CEOs, VPs, et.al. was quite concentrated with 2/3 of total Buying in 1 of the 10 Sectors - Finance; meanwhile 1/3 of Selling was in Tech - both the opposite of Conventional Wisdom, and pundit prattling. Selling outdid Buying 26:1, up from 13:1.
Here are last weeks findings:

Mktsentiment. 11/2/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13595………..13806………..14093..............7286
Nasdaq………. 2810………….2805……….. 2810.............1114
S&P500…….. 1509…………1535…………1561………..776
CBOE Eq. put/call …63……………66……………91…..........46-1/03

VIX ………. 23……………22.9…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 165…………..246……………246………..118
All Equities (ETF)
McClel Osc…………-24………….-2………91-5/04.........(81)-5/04
McClelSum………112…………….280…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 53.8………..56.5………..62.9-12/04......35-6/06
Bear:………….... 23.1…………22.9………… 38.2-3/03.......16-6/03

AAII-Bull/Bear …...…44.7/36.5…….31.3/48.2……..n/a n/a
MarketVane Bulls….......64…………..63…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.63………8.56….……8.95………. 4.0
Public/NYSE Spec.-..…8.31……….6.96 …..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll …….....…44.8/37.9….44/42
Bullish%- ……........…54………….62……….…88 -2/04...... 46-8/04
*Insider corporate sellers..26:1….13:1
Sectors: Most Buyers: Finance (2/3 of total 10- sectors)
Most Sellers: Tech (1/3 of total)

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

TRADING PLACES:

"WITCH" WAY WEDNESDAY?:

This Wednesday, Hallowe'en, the Fed will announce its rate cut - not at the usual Tuesday 11:15 PST time. Some feel much of the reaction has already occurred, and the Indicators are just as ambivalent.
Although the CBOE put/call ratio is still somewhat high (Bullish), the ISEE - still in a newly revised range - is off the charts at 246 calls to puts! And the AAII Bears are far from hibernation as they invert the ratio 48 to 31 Bulls.
Corporate insider selling is way down from 43 to 13 to 1 over buyers (they are still buying their own Financial stocks but also selling them, along with Tech stocks).
Money Market inflows are still setting new record highs, at $35B last week. Market breadth, especially in the OTC area, is suspect considering the recent rally - new lows outpaced new highs, the Bullish Per Cent is still falling on a Sell signal given in Oct., and the Nasdaq to NYSE Volume (speculative warning) is at a 5-year high at 183.
Here are the weekly numbers:

Mktsentiment. 10/26 /2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13806………..13522…………14093..............7286
Nasdaq………. 2504…………2725……….. 2805.............1114
S&P500…….. 1535…………1500…………1561………..776
CBOE Eq. put/call …66……………65……………91…..........46-1/03

VIX ………. 19.6…………..22.9…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 246?................122……………246………..118
All Equities (ETF)
McClel Osc…………-2…………….-56………91-5/04.........(81)-5/04
McClelSum………280……………..440…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….56.5………… 62………..62.9-12/04......35-6/06
Bear:………… 22.9………….19.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……31.3/48.2….42.0/35.7……..n/a n/a
MarketVane Bulls….63……………65…………. 74..............24
UBS investor confidence..70………68………178……………53
(monthly change)
IBD: Short Interest- …8.56………8.76….……8.95………. 4.0
Public/NYSE Spec.-….6.96……….7.88…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………44.24………..50./33.3
Bullish%- 59……….....62…………88 -2/04......46-8/04
*Insider corporate sellers..13:1……43:1…
Sectors: Most Buyers: Finance
Most Sellers: Tech, Finance

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

"WITCH" WAY WEDNESDAY?:

THE BLACK SWAN:

Not the Australian wine, but an excellent book by Nassim Taleb about improbable events. Its 3 characteristics are: it is unpredictable, it has massive impact, and, most of all, looks very logical after the fact - examples are the Crash of '87, 9/11, the success of Google, and the past two weeks, when I have been on vacation without access to Barron's, IBD, CNBC, and e-mail.
After recouping 3 weeks of statistics, the following shows a high probability of the downturn occurring, even despite the expected mid-October cycle.
Here are some indications which lit the caution light in early October: the ISE call/put index hit a near high 164; the A/D on the NYSE was 2600 to 900, with further speculation from new highs/lows at 500 to 70. The McClellan Oscillator hit @ +50 and the Inv.Intell. Bulls reached 60 to 21 Bears; Nasdaq Volume to NY was a recent high of 179 and CEO insider selling rose to 43:1. Record amounts went into Money Market funds, and the IBD short interest rose to a record 8.95.
Here are last weeks stats:

Mktsentiment. 10/19 /2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13522……….14093…………14093..............7286
Nasdaq………. 2725…………2805……….. 2805.............1114
S&P500…….. 1500…………1561…………1561………..776
CBOE Eq. put/call …65……………58……………91…..........46-1/03

VIX ………. 22.9…………17.7…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 122……………164……………177………..118
All Equities (ETF)
McClel Osc…………-56……………12………91-5/04.........(81)-5/04
McClelSum………440………………280…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 62…………60.2………..62.9-12/04......35-6/06
Bear:………… 19.6………….21.5………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……42.0/35.7……..54.6/25.8……..n/a n/a
MarketVane Bulls….65……………69…………. 74..............24
UBS investor confidence..68……….73………178……………53
(monthly change)
IBD: Short Interest- …8.76……..8.95nh….……8.95………. 4.0
Public/NYSE Spec.-….7.88…..…7.89…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………50./33.3…….…36/40
Bullish%- ……….62……………...80……….…88 -2/04...... 46-8/04
*Insider corporate sellers..43:1………na
Sectors: Most Buyers: none
Most Sellers: healthcare

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

THE BLACK SWAN:

BYE, BYE:

Readers please be advised that for technical reasons, this column will not be updated for the next two weeks whilst I am on vacation (although I'll have my laptop, not all the research necessary to post). Giving a small talk last weekend at GGU on Sentiment allowed me to organize some matrices on the efficacy and order of importance of several Indicators, which I shall present when I return. Despite the recent parabolic runup, this is always a good time of year to be flat the market, or at least hedged.
Here are some small sampling factoids of interest:
Over the last 42 months, the number of times the SPX did not close at or below the expiration close by the end of that month: 6 (2 times in the past 2 years).
Over the last 30 months, number of times the SPX did not close at or higher than the Tuesday close before expiration (3 days before): 3
Times that the last day of a Quarter was negative over 13 quarters: 12
Times the DJIA was up the 4th Quarter over the past 27 years: 24.

This week's Indicators of Interest:
The McClellan Summation (cumulative Oscillator readings) went up throught the zero line this week - some view this as a positive. The Inv.Intell. and Market Vane surveys stretched to somewhat complacent. Both the Consumer Confidence and UBS Investor Optimism dropped to recent lows. Insider (officers) selling increased to 32:1, still Buying the Financials and Selling the Techs.
Public shorting shot up to 11 vs. what Specialists remain, and mutual funds suffered redemptions to money market funds.

Mktsentiment. 9/28/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13895……….13820………14001..............7286
Nasdaq………. 2701…………2671……….. 2707.............1114
S&P500…….. 1526…………1525…………1557……..776
CBOE Eq. put/call …66……………60…………… 91…..........46-1/03

VIX ………. 18…………….19…………….44.. 9/02........10.0-7/05

ISEE-call/put ……. 134……………151……………177………..118
All Equities (ETF)
McClel Osc…………27……………39………91-5/04.........(81)-5/04
McClelSum………62………………-60…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 55.6…………53.9………..62.9-12/04......35-6/06
Bear:………… 25.6………….27………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……49.4/34.2……..39.2/31.7……..n/a n/a
MarketVane Bulls….64……………64…………. 74..............24
UBS investor confidence..68……….73………178……………53
(monthly change)
IBD: Short Interest- …8.66……..7.77….………8.66………. 4.0
Public/NYSE Spec.-….11.09.88…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………22.6/53.2…….…22.6/53.2
Bullish%- ……….63……………...62……….…88 -2/04...... 46-8/04
*Insider corporate sellers..32:1………28:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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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BYE, BYE:

SLIP SLIDING AWAY:

Recently on CNBC, Robert Stovall, the Fundamental dinosaur and ultimate disser of Technical Analysis, expounded the technical study that, more often than not, the final week of September (and the U.S.Gov't's fiscal year) is a downer. Today's continuation of the Ben-efit rate cut is ending the day with yet another 100 point swing to the downside- not boding well for the week. In a study I've been doing, in 36 of the past 42 months the SPX has made a lower or even close between option expiration and the end of the month.
As one might expect, Bullish sentiment has rebounded with the rate cut and concomitant market rise: the CBOE put/call ratio dropped as the ISE call/put ratio rose materially; all the newsletter surveys jumped up to the Bullish camp, yet Public shorting rose vs. Specialists (those that are left). Corporate insiders are selling (Tech and Energy) while buying Finance at a 28:1 clip. Finally, investment money has stopped going into Money market funds and mutual funds, but sent 28 Billion into ETFs for the week.
Here are the stats:

Mktsentiment. 9/21/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13820……….13442………14001..............7286
Nasdaq………. 2671…………2602……….. 2707.............1114
S&P500…….. 1525…………1484…………1557……..776
CBOE Eq. put/call …60……………68………… 91…..........46-1/03

VIX ………. 19…………….34.9………44 9/02........10.0-7/05

ISEE-call/put ……. 151……………118………..177………..118
All Equities (ETF)
McClel Osc…………39…………….31………91-5/04.........(81)-5/04
McClelSum………-60……………..-246…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 53.9…………48.3………..62.9-12/04......35-6/06
Bear:………… 27……………31.0………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……39.2/31.7……..40/35.3……..n/a n/a
MarketVane Bulls….64…………… 58…………. 74..............24
UBS investor confidence..73………..87……………178……………53
(monthly change)
IBD: Short Interest- …7.77………..7.41….………8.25………. 4.0
Public/NYSE Spec.-….9.88………...7.85…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ……22.6/53.2………26.9/50
Bullish%- ………...62…………..54……….…88 -2/04...... 46-8/04
*Insider corporate sellers..28:1……..22:1
Sectors: Most Buyers: Finance
Most Sellers: Tech, Energy

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

SLIP SLIDING AWAY:

FIRST CUT IS THE DEEPEST:

Whether Uncle Ben cuts rates 1/2 point or two 1/4 points, economists and analysts end-to-end will still not reach an opinion about market direction - as usual, the technicals: Price, Volume, Trend momentum, are the things to watch. In a small sampling of rate cuts over almost 40 years, Laszlo Birinyi observes that 7 of 9 resulted in up markets shortly after, although (nota bene) there was an 18% decline in 2001. The average gain for 3 months was 5.5%; after 6 months , over 12% - and the seasonal timing is on its favor.
Implied Volatility in options is already at a 4-year high, and Tuesday's news on rates and broker earnings could even widen that.
In apprehension of this, trading volume has receded and sentiment indicators have regressed from their Bullish position a bit. Although still young, the revised ISEE call to put ratio seems to correlate pretty well, as its high 177 level preceded the decline of 2 weeks ago and its swing to 118 has seen a slow market rise; the opposite CBOE put/call ratio remains Bullishly high at 68, off its 71 mark.
The AAII and I.I. surveys have swung back to neutral/complacent; the Birinyi bloggers, in early testing, seem to be more prescient than contrary - their new high of 50 negative certainly "Bears" watching, as does the huge decline in Public shorting. Money continues to flow back into money market funds, and CEO insider selling has picked up again.
Here are all the numbers:

Mktsentiment. 9/14/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13442……….13113………14001..............7286
Nasdaq………. 2602…………2565……….. 2707.............1114
S&P500…….. 1484…………1453…………1557……..776
CBOE Eq. put/call …68…………..69………… 91…..........46-1/03

VIX ………. 24.9…………26.2………44 9/02........10.0-7/05

ISEE-call/put ……. 118………….177………..177………..118
All Equities (ETF)
McClel Osc…………31……………21………91-5/04.........(81)-5/04
McClelSum………-246………….-370…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 48.3………..42.9………..62.9-12/04......35-6/06
Bear:………… 31.0………….37.4………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……40/35.3………38.4/42.4……..n/a n/a
MarketVane Bulls…. 58………….59…………. 74..............24
UBS investor confidence..73………..87……………178……………53
IBD: Short Interest- …7.41…………7.0….………8.25………. 4.0
Public/NYSE Spec.-…..7.85…………12.9…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ……26.9/50…………31.3/40.6
Bullish%- ………...54……………52……….…88 -2/04...... 46-8/04
*Insider corporate sellers..22:1………30:1

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

FIRST CUT IS THE DEEPEST:

SURGIN' FOR GOLD:

The link below has a very clear and concise technical readout on gold, which traditionally acts well in Sept., especially if we're up to our ears in credit issues:
http://headlinecharts.blog.com/
With $6 to $8T in global securitized residential mortgages out there somewhere(?) getting ready to reset from bending to breaking the homeowners/speculators (according to Stephanie Pomboy of Market Maven), and the Dollar index breaking below $80, it's no wonder that gold broke $700. Last January Louise Yamada audaciously called for $1000 gold - we may see it yet.
On top of that, Barron's notes that the mortgage rates are tied to the LIBOR rate, which has been rising due to fear.
Despite Friday's dramatic sellof and today's followthrough, not much in the way of indicators is in extremis. Both the ISE call to put ratio and the Market Vane bulls rose materially, and Tom McClellan thinks the breadth washout is setting up for a late Sept. rally. The AAII is still nicely inverted, but I would still hedge any equity investment for the next few weeks. I wonder what effect the Specialists' upcoming disappearance will have on stocks - I'm sure they'll be grabbing all they can as they circle the drain!
Here are the stats:

Mktsentiment. 9/7/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13113……….13357………13668..............7286
Nasdaq………. 2565…………2596……….. 2707.............1114
S&P500…….. 1453…………1474……….. 1557……..776
CBOE Eq. put/call …69…………..71………… 91…..........46-1/03

VIX ………. 26.2…………23.4………44 9/02........10.0-7/05

ISEE-call/put ……. 177…………..135………..177………..133
All Equities (ETF)
McClel Osc…………21……………..63………91-5/04.........(81)-5/04
McClelSum………-370………………-569…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 42.9………….41.7………..62.9-12/04......35-6/06
Bear:………… 37.4………….37.4………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……38.4/42.4……..40.3/46.3……..n/a n/a
MarketVane Bulls…. 59…………….53…………. ………74..............24
UBS investor confidence..73………..87……………178……………53
IBD: Short Interest- …7.0…………….6.42………8.25………. 4.0
Public/NYSE Spec.-…..12.9…………10.3……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ……31.3/40.6………..27.2/36.3
Bullish%- ………...52……………49……….…88 -2/04...... 46-8/04
*Insider corporate sellers..30:1……..10.2:1
Sectors: Most Buyers: Finance/Tech
Most Sellers: Tech, Healthcare

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

SURGIN' FOR GOLD:

TRY TO REMEMBER...:

When the media gets too far on one side of an issue, such as September being historically the worst month of the year for securities, leave it to the markets to fool most of the people most of the time. With few exceptions (coming off a very strong oversold condition), Sentiment Indicators are still mostly positive, at least very short term - until mid-Sept. when we get the Surgin' General's Iraq report, the FOMC decision, brokers' Q2 earnings, and option expiration. We also get more recent housing, credit, and employment data. Since only 40 of the 10,000 hedge funds control 60% of stocks (per WSJ's Charles Gasparino), these big boys could continue to shake things up like a puppy with a rag doll.
This week the UBS Investor Confidence poll was added to the indicators primarily due to its sudden decline from 87 to 73 - it fell to 53 in August of '06 the start of this recent rally. The UBS survey is a Gallup poll of 800 investors with a minimum of $10,000 in equity assets.
Other Bullish extremes include the CBOE Equity put/call ratio again with a 7-handle at 71; the Bullish Per cent is still at a multi-year low of 49, on a Buy signal (it had hit 12 and 16 respectively in '01 and '02); finally, the AAII survey is still inverted, with more Bears than Bulls, and corporate insider buying remains positive.
Here are the results:

Mktsentiment. 8/31/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13357……….13378………13668..............7286
Nasdaq………. 2596…………2576……….. 2707.............1114
S&P500…….. 1474…………1479……….. 1557……..776
CBOE Eq. put/call …71…………..64………… 91…..........46-1/03

VIX ………. 23.4…………20.7………44 9/02........10.0-7/05

ISEE-call/put ……. 135…………..133
All Equities (ETF)
McClel Osc…………63……………..69………..91-5/04.........(81)-5/04
McClelSum………-569………………-747…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 41.7………….40.6………..62.9-12/04......35-6/06
Bear:………… 37.4………….37.4………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ………40.3/46.3……41.3/46.1…..n/a n/a
MarketVane Bulls…. 53…………….54…………. ………74..............24
UBS investor confidence..73………..87
IBD: Short Interest- …6.42…………….6.25………8.25………. 4.0
Public/NYSE Spec.-…..10.3…………18.25nh……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ……27.2/36.3………..43.3/33.3
Bullish%- ………...49……………49……….…88 -2/04...... 46-8/04
*Insider corporate sellers.10.2:1……...6:1
Sectors: Most Buyers: Finance
Most Sellers: Tech, Healthcare

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

TRY TO REMEMBER...:

SURGIN' GENERAL:

With apologies to IBD for borrowing the General Petraeus line, let me be the first to brand the current rally in the market the Surge Rally, just as we had rallies prior to other Gulf War announcements. This rally, however, after a long, tired Bull Run won't have the legs to make it through much of September; historically the last 3 days of August and Labor Day are usual UP days, but the last week in September is usually "circling the drain" into October. Especially with the news from recent statistics on housing, credit, and the FOMC, etc. due mid-month.
The extremes reported here last week certainly carried us through a nice retracement rally off oversold conditions, with the 91 put/call reading, huge Public shorting while Specialists and key employees took the long side (they are still selling healthcare and tech, while buying finance stocks).
The McClellan Summation hit a new recent low of -917 at its nadir, but now the Oscillator is overbought at +69. However, the AAII newsletter survey remains inverted and the I.I. finally caught up to almost parity of Bulls and Bears. The Bullish Per Cent bottomed out and gave a 3-box (pt.& fig.) BUY signal.
Meanwhile money continues to flow into the various ETFs, but the average investor, who was never really into mutual funds, bailed out again last week, and Money Market Funds, despite the credit scare, soared to $76B -please see below:

Mktsentiment. 8/24/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13378………13079 …........… 13668..............7286
Nasdaq………. 2576………..2505………. ...... 2707.............1114
S&P500…….. 1479………..1445……… ....... 1557……..776
CBOE Eq. put/call …64…………91nh………….…. 91…..........46-1/03

VIX ………. 20.7……….29.99……….44 9/02........10.0-7/05

ISEE-call/put ……. 133………..105
All Equities (ETF)
McClel Osc……69……………….-20………………64.91-5/04.........(81)-5/04
McClelSum……-747…………..-917nl…………...1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 40.6………..43.8……….........62.9-12/04......35-6/06
Bear:………… 37.4………… 32.6……….. 38.2-3/03.......16-6/03

AAII-Bull/Bear ………41.3/46.1…..42.2/45.6……n/a n/a
MarketVane Bulls…. 54…………. 52…………. ………74..............24
IBD: Short Interest- …6.25……….6.17………8.25………. 4.0
Public/NYSE Spec.-…..18.25nh……15.89nh……..18.2579……….1.0
Birinyi Blogger
Bull/Bear Poll ……43.3/33.3……..43.3/33.3
Bullish%- 49………39nl……….…88 -2/04...... 46-8/04
*Insider corporate sellers..6:1……….6:1
Sectors: Most Buyers: Finance
Most Sellers: Tech, Healthcare

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

SURGIN' GENERAL:

Cramer Emptor:

Those of us who enjoy schadenfreude must have liked the James Cramer cover story in Barron's this weekend, about with all his antics and wisdom, his picks have underperformed all major indices.
This week shook loose a lot of Indicators from their August stupor. Technician John Roque states that although stocks above their 200-MA number only 30%, they slid to 15 and 16 in this decade's prior corrections; however, Bullish Per Cent slid below its 2001 low of 38 (to 36-closing the week at 39), a major Buy signal. Major indices dropped below their 200-EMA, but closed at or near them on Friday.
The CBOE Equity put/call ratio jumped to a new high (nh) of 91 -most Bullish- while the ISEE call to put ratio is again re-revised, as we await meaningful data there. Washout new lows on the NYSE were 65 to 1284, a 20:1 ratio.
Newsletter surveys, out before the week's end, were mixed: the I.I was unchanged while the AAII inverted to 42 vs 45, normally a Buy signal; Market Vane dropped nicely to 52, while insiders selling was low, at 6:1. Just looking over the last 2 months the Birinyi bloggers seem to have it more right than the contrary above newsletter. Public shorting was huge at a record 15.89 for each Specialist, and I started tracking Money Market Funds behind the rumor that short term CP had a lot of CDOs, auto loans, etc., but their inflows were the highest YTD, at $42B. ETFs were also heavily bought, although mutual funds showed slight outflows for the week.
With Sept. and Oct. looming, it might be wise to tiptoe in while seeing if this credit crunch will bend but not break!
Here are the stats:
Mktsentiment. 8/17/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13079……..13239 …… 13668..............7286
Nasdaq………. 2505……….2544……… 2707.............1114
S&P500…….. 1445………1453………. 1557……..776
CBOE Eq. put/call …91nh………….65…………. 91…..........46-1/03

VIX ………. 29.99……….28.3………..44 9/02........10.0-7/05

ISEE-call/put ……. 105
All Equities (ETF)
McClel Osc……-20………………-31…………-64.91-5/04.........(81)-5/04
McClelSum……-917nl…………....-667…….…….-1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 43.8………..43.8……….........62.9-12/04......35-6/06
Bear:………… 32.6……….. 31.5…………38.2-3/03.......16-6/03

AAII-Bull/Bear ………42.2/45.6……45.8/39…....n/a n/a
MarketVane Bulls…. 52………….58………… ………74..............24
IBD: Short Interest- …6.17……….6.65………….8.25………. 4.0
Public/NYSE Spec.-…..15.89nh……..9.07……….…15.89……….1.0
Birinyi Blogger
Bull/Bear Poll ……43.3/33.3…….35.3/41.2….
Bullish%- ………39nl……….…50...........88 -2/04...... 46-8/04
*Insider corporate sellers..12:1….7:1……..
Sectors: Most Buyers: Finance
Most Sellers: Tech, Healthcare

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

Cramer Emptor:

NINJA LOANS:

According to an article in Barron's, NINJA stands for NoIncome, NoJob, or Assets! That seems to be the primary cause of this market meltdown, although something else would have eventually provoked it. It is hard to believe that the word CREDIT is derived from the Latin Credo , or BELIEF. As usual, technicians disagree about the immediate future, with Tom McClellan calling for a multi-week bounce due to the 20-week cycle (which bottomed on July 30 exactly 20 weeks from the March 14 low); on CNBC today, veteran Phil Roth sees a 20-25% Bear market ahead and backs it up with high selling Volume (low buying), most stocks and the smaller caps below the 200MA - although the S&P 500 and DJIA bounced exactly up off it. However, horizontal Resistance looms ahead on these indices.
It is hard to imagine that, what with a 400-point down day, we finished the week positive. The newsletter surveys, usually put out on Wednesday, were barely changed, prior to Bloody Thursday. Extremes were seen in the VIX at 28+, McClellan Summation, now -667, and the Bullish per cent at horizontal suppport of 47 (however, giving a 3-box sell signal).
ETF inflows were huge, at 10B, although mutual funds showed a slight outflow.
Here are the stats:

Mktsentiment. 8/10/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13239…….........13181 ……... 13668..............7286
Nasdaq………. 2544……….......2511………. .... 2707.............1114
S&P500…….. 1453………........1433............... 1557……..776
CBOE Eq. put/call …65………….......77 .87-5/04........46-1/03
.
VIX ………. 28.3………..25.16..................44 9/02........10.0-7/05

ISEE-call/put ……. n/a………….67.......................67....................28.

McClel Osc……-31………………-64.................91-5/04.........(81)-5/04
McClelSum……-667…………….-525..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..43.8………..47.2.......62.9-12/04......35-6/06
Bear:………… 31.5…………26.4.........38.2-3/03.......16-6/03

AAII-Bull/Bear ………45.8/39…….45.9/40…....n/a n/a
MarketVane Bulls…. 58………… 56......... ………74..............24
IBD: Short Interest- ….6.65………7.23…….….8.25………. 4.0
Public/NYSE Spec.-…..9.07……….8.05………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll ……35.3/41.2….20.0/34.3
Bullish%- ………47……….…50...........88 -2/04...... 46-8/04
*Insider corporate sellers..12:1….7:1……..
Sectors: Most Buyers: Finance
Most Sellers: Tech, Healthcare

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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NINJA LOANS:

CMJ-CRITICAL MARKET JUNCTURE:

JASON - July to November- is often a miserable time for the stock market (even with Congress on vacation -and just about everyone else), but this year seems to be even more ugly. It is decision time; whether to sanely observe one's benchmark stops, or avoid that frequent -Why do I always sell out at the bottom? Even with 3-day filters of broken support levels, damage is getting severe, especially in the OTC (non-global) stocks. Should one "cut-and-run", or stay the course?
It could take weeks before the loan default mess that affects financial stocks, hedge funds, private equity, even foreigners with Trillions of dollars in national wealth reserves, plays out. Luckily, the stock market looks ahead. The Russell 2000 is over 12% from its double-top recent highs; the Nasdaq Comp is at its 200-EMA; the S&P 500, with its global stocks, has barely broken horizontal support and the 200-EMA, and only by a couple days.
Hopeful Sentiment signs are emerging, although as with oscillators, they can remain oversold for awhile: the Bullish Per Cent is near its low of 46 with a 50 reading; the McClellan Oscillator, although off its lows of last week, is under water at -64, with its concomitant Summation Index way overcooked at -525 .
Surveyed Bears have risen up with the Inv.Intell. at 26 from a complacent record low of 18 just last week. Finally, the CBOE put/call ratio is at a high of 77, and public shorts and short interest are high.
Here are the facts:
Mktsentiment. 8/3/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13181........... 13265 …… 13668..............7286
Nasdaq………. 2511............ 2562 2707.............1114
S&P500…….. 1433.......... 1458............... 1557776
CBOE Eq. put/call ….77...........72 .87-5/04........46-1/03

VIX ………. 25.16……24.17. ..................44 9/02........10.0-7/05

ISEE-call/put ……. 67…………35.......................67....................28.

McClel Osc……-64………-103.................91-5/04.........(81)-5/04
McClelSum……-525……….. -215 ..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..47.2…………53.9.......62.9-12/04......35-6/06
Bear:………… 26.4………. 18.0 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………45.9/40…44.2/36.8…....n/a n/a
MarketVane Bulls…. 56………..64......... ………74..............24
IBD: Short Interest- ….7.23………7.82…….….8.25………. 4.0
Public/NYSE Spec.-…..8.05……….6.85………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………20.0/34.3.. 20.0/34.3
Bullish%- ……….…50…………54...........88 -2/04...... 46-8/04
*Insider corporate sellers..7.1……..7:1………
Sectors: Most Buyers: Finance
Most Sellers: Tech

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-CRITICAL MARKET JUNCTURE:

WATCH OUT FOR JASON:

Of course I mean the months July through November, where markets seem to get a little bumpy, historically. As my friend and long time veteran of the markets states: Stocks don't GO up and down, they're PUT up and down, by those he calls the "they". Meanwhile talking heads and media writers scramble for likely reasons to satisfy the retail crowd's quest for answers.
Despite the terrible breadth of the market - 10 to 1 Decliners, record Volume on down days, the DJIA's worst weekly decline in 5 years, and a 15 year New Low level of 783, there is some positive data to report.
Over the past 60 years some 19 occasions occurred where a decline after a new high resulted - only 1 (1987) produced a Bear market. The Fed model looks like a 10-year Treas. at 4.8% vs. an Earnings Yield of 6.7%, corporate insider selling has slowed dramatically (7:1) and commercial hedgers are net long.
Last week produced some nice extremes: The McClellan Oscillator (ratio-adjusted) broke below -100, record short interest suggests an iminent rebound; the VIX spiked above 24 and looking back several years shows parabolic spikes which settle back on rising markets. The I.I. survey still shows a lowly 18% Bears, which preceded this selloff, but that figure is reported on Wednesday, the first day of the major decline.
Finally, the Bullish Percent dropped to a 54 reading, with 48 nearterm support, and the CBOE Equity put/call ratio is a mighty 72.
You might notice that I have widened the matrix below to include last week's figures (like the big boys do) for comparison sake.

Mktsentiment. 7/2/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13265...........13851 13668...........7286
Nasdaq………. 2562............ 2687 2707...............1114
S&P500…….. 1458............1534............ 1557..............776
CBOE Eq. put/call ….72................62 .87-5/04........46-1/03

VIX ………. 24.17……. 16.9...........................44 9/02........10.0-7/05

ISEE-call/put ……. 35……………….57......................28.......57 - 7/13/07
(>200/Bearish)

McClel Osc……………-103………..-36.......................91-5/04.........(81)-5/04
McClelSum……………-215……….. 157....................1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..53.9…………52.3..................62.9-12/04......35-6/06
Bear:………… 18.0………. 19.3 .....................38.2-3/03.......16-6/03

AAII-Bull/Bear ………44.2/36.8……41.8/36.7....n/a n/a
MarketVane Bulls…. 64………..69......... ……...........…74..............24
IBD: Short Interest- ….7.82………8.25……................8.25………. 4.0
Public/NYSE Spec.-…..6.85………..8.87……............…13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………44.2.36.8…25.7/34.3
Bullish%- ……….…54…………73...............................88 -2/04...... 46-8/04
*Insider corporate sellers..7:1………15:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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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WATCH OUT FOR JASON:

SHOW ME THE MONEY!

The Money Show is back in S.F. this week, with a less than impressive array of names. Speakers of interest are Price Headley ( the only vestige of the Schaeffer circle this year), Harry Domash, local stock screening guru, Larry MacMillan and Dr. J Najarian for optioneers - corporate talkers are S&P, Vector Vest and Everbank amongst thousands of vendors. Pay speakers include Newt Gingrich and Elaine Garzarelli.
Sentiment indicators moved slightly to the cautious side after the large-Volume selloff days of last weeks option expiry. Bears increased their presence in the Birinyi blogger poll and AAII survey; Public shorting and short interest ( a 5-year high) rose appreciably, and the inflows to ETFs (hedgers, etc.) shot up, as you will see below. The CBOE put/call ratio also rose, and the ISEE underwent a revision - a new range has to be built for this call/put number.

Finally, the McClellan Oscillator got as low as -36, resulting in a Monday rally.

Mktsentiment. 7/20/2007......5Yr.HI........ LOW

DJIA ………. 13851...........13668...........7286
Nasdaq………. 2687............2627.............1114
S&P500…….. 1534............1536............776
CBOE Eq. put/call ….62............87-5/04........46-1/03

VIX ………. 16.9..........44 9/02........10.0-7/05

ISEE-call/put ……. 57...........299-12/04.......57 - 7/13/07
(>200/Bearish)

McClel Osc……………-36...............91-5/04.........(81)-5/04
McClelSum…………… 157..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..52.3...........62.9-12/04......35-6/06
Bear:………… 19.3 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………41.8/36.7....n/a n/a
MarketVane Bulls…. 69......... 74..............24
IBD: Short Interest- ….8.25…….8.25………. 4.0
Public/NYSE Spec.-…..8.87………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………25.7/34.3
Bullish%- ……….…73...............88 -2/04...... 46-8/04
*Insider corporate sellers..15:1
Sectors: Most Buyers: Basic Mat'ls
Most Sellers: Basic Mat'ls

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

SHOW ME THE MONEY!

LAZY,HAZY,DAYS OF SUMMER:

Despite the huge rally last week most sentiment indicators barely budged: the CBOE put/call moved down 1 pt., the VIX up .4; A/D breadth was about even, reflected by the McClellan numbers; the Inv.Intell. Bulls moved up .1, although the Bears came out of record low hibernation from 18 to 21.3.
Corp. insiders selling jumped from a lowly 9:1 to 38:1, mostly tech and finance stocks. And the Public shorting was raised to 8.3 over remaining Specialists.
Michael Santoli, one of the brighter lights at Barron's, cites the increase of long positions by commercial hedgers (which he calls "smart money") to a multi-year high.
Here are the latest stats:

Mktsentiment. 7/13/2007......5Yr.HI........ LOW

DJIA ………. 13907...........13668...........7286
Nasdaq………. 2707............2627.............1114
S&P500…….. 1557............1536............776
CBOE Eq. put/call ….53............87-5/04........46-1/03

VIX ………. 15.1..........44 9/02........10.0-7/05

ISEE-call/put ……. 57...........299-12/04.......57 - 7/13/07
(>200/Bearish)

McClel Osc……………18...............91-5/04.........(81)-5/04
McClelSum…………… 243..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..49.5...........62.9-12/04......35-6/06
Bear:………… 21.3 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………49.5/21.3....n/a n/a
MarketVane Bulls…. 65......... 74..............24
IBD: Short Interest- ….7.52……7.82………. 4.0
Public/NYSE Spec.-…..8.36………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………36.0/32.0
Bullish%- ……….…74...............88 -2/04...... 46-8/04
*Insider corporate sellers..38:1
Sectors: Most Buyers: Technology
Most Sellers: Technology,Finance

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

LAZY,HAZY,DAYS OF SUMMER:

VIX OPTIONS:

The VIX Index, begun in 1993 with S&P 100 near options (now changed to S&P 500), is hardly a Leading sentiment indicator, but now that there are "finally" options on it, might be worth considering for insurance purposes. Although there will always be time decay, the fact that its price is stable unless provoked by a sudden downmove in the market, the options won't get the large decay of the underlying stock, index, ETF if these move against you.
Last week's sentiment indicators were about as exciting as the market Volume, with most regressing to the middle. Notable exceptions were the record (again) low level of Bears in the I.I. survey at 18.0, and the paucity of Insider Sellers at 9:1 - it was 61:1 sellers to buyers 2 weeks ago and 97:1 a month ago!
Here are the numbers:

Mktsentiment. 7/6/2007......5Yr.HI........ LOW

DJIA ………. 13611...........13668...........7286
Nasdaq………. 2666............2627.............1114
S&P500…….. 1530............1536............776
CBOE Eq. put/call ….54............87-5/04........46-1/03

VIX ………. 14.7..........44 9/02........10.0-7/05

ISEE-call/put ……. n/a...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………27...............91-5/04.........(81)-5/04
McClelSum…………… 186..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..49.4...........62.9-12/04......35-6/06
Bear:………… 18.0 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………43.8/32.9....n/a n/a
MarketVane Bulls…. 67......... 74..............24
IBD: Short Interest- ….7.66……7.82………. 4.0
Public/NYSE Spec.-…..7.17………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………36.0/32.0
Bullish%- ……….…73...............88 -2/04...... 46-8/04
*Insider corporate sellers..9:1
Sectors: Most Buyers: Basic Mat'ls
Most Sellers: Technology

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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VIX OPTIONS:

JANUARY EFFECT LIGHT (ECHO):

As Q3 of '07 begins, it is typical to have a mini-bull rush of new institutional funds similar to January, as evidenced by today's 100+ point runup. Holidays (July 4th) add to that euphoria, but will it last? The Bulllish Percent is down 3 PNF boxes ( any lower would be a 6% sell signal) so the next few days are key. The major indices look toppy with Double Tops, although the Nasdaq looks stronger.
As the quarter ended, Insider (CEO) Selling backed way off to 17:1 from 61 the week before, with Finance, Healthcare leading the buyers, Energy slightly leading the sellers. Surveyed Bulls backed off also, and Specialist shorting leapt up from 6.6 to 9 over the Public.
Another slight revision of the Sentiment Indicators in which the ISE exchange sees fit to charge for their put/call ratio - albeit only $10/month, not that valuable a statistic with the CBOE still available.
Here are the numbers:

Mktsentiment. 6/29/2007......5Yr.HI........ LOW

DJIA ………. 13408...........13668...........7286
Nasdaq………. 2603............2627.............1114
S&P500…….. 1503............1536............776
CBOE Eq. put/call ….66............87-5/04........46-1/03

VIX ………. 16.2..........44 9/02........10.0-7/05

ISEE-call/put ……. n/a...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-11...............91-5/04.........(81)-5/04
McClelSum…………… 89..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..53.8...........62.9-12/04......35-6/06
Bear:………… 20.4 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………39.0/35.8....n/a n/a
MarketVane Bulls…. 63......... 74..............24
IBD: Short Interest- ….7.25……7.82………. 4.0
Public/NYSE Spec.-…..9.02………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………31.4/31.4
Bullish%- ……….…72...............88 -2/04...... 46-8/04
*Insider corporate sellers 17:1
Sectors: Most Buyers: Healthcare, Finance
Most Sellers: Energy

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 EFFECT LIGHT (ECHO):

SPECIAL TREATMENT:

Occasionally, Sentiment Indicators come and they go - as Charles Gasparini of WSJ reports, the Specialist shorting may be one that goes!. He claims that around Labor Day this year, the last of the floor Specialists on the NYSE will have folded their tents, thanks to John Thain's inevitable (?) electrifying of the exchange.
Although new highs dominated new lows last week 3:1, even on the Nasdaq which doesn't consist of 50% non-common ( preferred, ETFs, etc.) stocks, the Selling Volume on Friday was huge - 2.6B on the NYSE, 3.5B on the Nasdaq.
Advance/Decline breadth, exactly 2:1 decliners, was the most issues down since late Feb., the last major selloff. Short interest is again a record at 8 days to cover on the NYSE, and IBD's number is also a new high at 7.82.
Despite the ugly week, surveys were for the most part bullish, with Inv.Intell. Bears at their lowest level since July 2004, at 18+; even the AAII reversed positions to 43:33.
Finally, corporate Insider sold at a 61 to 1 ratio, with Tech sellers 100 to 1 over buyers.
Here are the numbers:
Mktsentiment. 6/22/2007......5Yr.HI........ LOW

DJIA ………. 13360...........13668...........7286
Nasdaq………. 2588............2627.............1114
S&P500…….. 1502............1536............776
CBOE Eq. put/call ….62............87-5/04........46-1/03

VIX ………. 15.7..........44 9/02........10.0-7/05

ISEE-call/put ……. 127...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-35...............91-5/04.........(81)-5/04
McClelSum…………… 248..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..53.3...........62.9-12/04......35-6/06
Bear:………… 18.9 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………43.2/33.7....n/a n/a
MarketVane Bulls…. 71......... 74..............24
IBD: Short Interest- ….7.82nh……7.82………. 4.0
Public/NYSE Spec.-…..6.59………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………35.2/29.4
Bullish%- ……….…75...............88 -2/04...... 46-8/04
*Insider corporate sellers 61:1
Sectors: Most Buyers: Healthcare, Finance (25 sellers:1)
Most Sellers: Tech (100 sellers:1)

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

SPECIAL TREATMENT:

COGNITIVE DISSONANCE:

The above is defined as the frustration of accepting new facts that disagree with the current comfortable belief, sometimes known as Contrary Opinion. In Barron's recent Other Voices, Kevin Duffy writes about some disturbing facts on today's market:
- Strategists at the 12 major firms are in unanimous agreement for higher stocks, the first time since 2000.
- Money market balances are at all-time low (21%) of assets; the ICI reports only 3.7% cash in Equity Funds, below the 3.9% record in 1972.
- Assets in Bear funds and short ETFs vs all Mutual Funds are 1 to 1,000.
- The Finance Sector is 22% of the S&P 500 and corporate profits from financial activity is double that number.
On the other hand, Goldman Sachs reports that 18 of the S&P 500 stocks are in merger/buyout mode with $23B (almost all cash) deals at risk in Supply.
Some Sentiment extremes this week include the Bearish ISEE indicator at 173; I.I. survey complacent at 56.7 Bulls to only 21.1 Bears, although the AAII inverted to cautious.
Corporate Insider Selling dropped from a high 97:1 last week to only 24:1, with Tech sellers 320:1.
Here are the numbers:
Mktsentiment. 6/15/2007......5Yr.HI........ LOW

DJIA ………. 13639...........13668...........7286
Nasdaq………. 2627nh............2627.............1114
S&P500…….. 1533............1536............776
CBOE Equity put/call 58............87-5/04........46-1/03

VIX ………. 13.9..........44 9/02........10.0-7/05

ISEE-call/put ……. 173...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………13...............91-5/04.........(81)-5/04
McClelSum…………… 289..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..56.7...........62.9-12/04......35-6/06
Bear:………… 21.1 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………37.3/43.7....n/a n/a
MarketVane Bulls…. 66......... 74..............24
IBD: Short Interest- ….7.58……7.66………. 4.0
Public/NYSE Spec.-…. 7.26………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………50/23.3
Bullish%- ……….…76...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBULL/BEAR. N(neutral)/N

*Insider corporate sellers 24:1
Sectors: Most Buyers: Healthcare, Energy (10:1)
Most Sellers: Tech (320:1)

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

COGNITIVE DISSONANCE:

JUNE SWOON:

Like the man said, every time breadth goes negative while the market makes new highs, the next month is down (avg. 2%). It happened 4 times over several decades, and 4 times in May. Today, Monday, the DJIA is at 13,464 - 50% rally from last week's decline is 13,471.

However, of the last 25 months, option expiry week (or, 3 days prior to the third Friday), 21 have been UP weeks, 3 DOWN, and 1 FLAT.

The number 1 culprit for the inevitable correction wan the 10-year Treasury breaching 4.75%, which predicted all the major selloffs the past 3 years - also extreme was the % above the 200-day MA on the DJIA: previous selloff levels were 8%, 5.2%, 6.7%, and 7.4% - this time it was 10% above! The resulting bottom was from 0 to 5% BELOW the 200MA -we've only reached a +3% above, so far.

The majority of sentiment indicators did not see last week's decline coming, in fact several are now cautiously Bullish. The McClellan Oscillator, now residing at -49 after hitting -75 is very bullish, as are the put/call ratios of ISE (rare 92) and CBOE (63) . The AAII Bull/Bear is still inverted, (bearly) at 40 vs.42, as is the Birinyi bloggers poll.
Calling for more downside is the McCellan Summation, Bullish per cent, and hugely extreme - the Corporate Insider sellin, now at 100-1, mostly in tech companies.
Here are the numbers:
Mktsentiment. 6/08/2007......5Yr.HI........ LOW

DJIA ………. 13242...........13668...........7286
Nasdaq………. 2573............2613.............1114
S&P500…….. 1507............1536............776
CBOE Equity put/call 63............87-5/04........46-1/03

VIX ………. 14.8..........44 9/02........10.0-7/05

ISEE-call/put ……. 92...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-49...............91-5/04.........(81)-5/04
McClelSum…………… 447..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..52.2...........62.9-12/04......35-6/06
Bear:………… 22.8 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………40.6/42.6....n/a n/a
MarketVane Bulls…. 72......... 74..............24
IBD: Short Interest- ….7.54……7.66………. 4.0
Public/NYSE Spec.-…. 7.15………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………26.4/32.3
Bullish%- ……….…74...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBULL/BEAR. N(neutral)/N

*Insider corporate sellers 97:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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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JUNE SWOON:

DON'T "FOLLOW" THE MARKET - LEAD IT!:

Especially at critical turning points Sentiment can help a trader define the risk in a market. Unfortunately, this doesn't seem to be one of those times. Most indicators appear to be boringly just as they were last week, in fact, even coming off those levels- with a couple exceptions: short interest, for whatever reasons - fear, hedging, speculating - is at record numbers with the IBD at 7.66; key corporate insider selling is high again at 43 to 1, with technology leading the pack by far (buyers' leader is the Finance group).
Despite the Asian selloff over the weekend, Birinyi's blogger Bulls reverted to bullish stance at 34:27 over Bears, although the AAII reversed this number to 33 Bulls vs. 45 Bears, which should be good for the market.
Breadth number appear strong, although nearly 50% of NYSE stocks are the un-common kind - preferred, ETFs, CEFunds, etc. A study of optionable stocks would be more accurate.
Finally, UBS Index of Investor Optimism jumped from 74 to 95 recently.
Here are the data:
Mktsentiment. 6/01/2007......5Yr.HI........ LOW

DJIA ………. 13668...........13668...........7286
Nasdaq………. 2613............2613.............1114
S&P500…….. 1536............1536............776
CBOE Equity put/call 61............87-5/04........46-1/03

VIX ………. 12.8..........44 9/02........10.0-7/05

ISEE-call/put ……. 119...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………23...............91-5/04.........(81)-5/04
McClelSum…………… 593..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..53.9...........62.9-12/04......35-6/06
Bear:………… 21.5 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………33.3/44.8....n/a n/a
MarketVane Bulls…. 72......... 74..............24
IBD: Short Interest- ….7.66nh……7.66………. 4.0
Public/NYSE Spec.-…. 6.7………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………34.5/27.6
Bullish%- ……….…78...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBULL/BEAR. N(neutral)/N

*Insider corporate sellers 43:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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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DON'T "FOLLOW" THE MARKET - LEAD IT!:

ARE H&S TOPS RELIABLE?:

By that I mean the talking heads and other experts on TV. Most are talking about the Sea of Liquidity driving the global markets, the most recent fact being the $2 Trillion of foreign Soveriegn Investment Funds, separate from Gov't Reserves which are mandated in U.S.Treasuries up until now. These extra monies, mostly in oil countries and Japan, could be moved into global equities for higher returns.
So far, the U.S. markets have underperformed global ones, but with the 10-year Treasury above 4.75% (above where Michael Santoli cites stocks have faltered the past 3 years), the stocks to bond ratio weakens.
Still, only the longer term Indicators seem toppy - Bullish per cent at 78, Market Vane at 73, even the Inv.Intell. ratio is high at 54 to 20 (the AAII Bull/Bear ratio just inverted again) . Most are mid-range with positive readings from the McClellan Osc. bouncing up off the -50 level (oversold); Birinyi's bloggers have inverted the I.I. numbers (see above); short interest is at record highs and Public vs. Specialists are wary.
Here are the numbers:

Mktsentiment. 5/25/2007......5Yr.HI........ LOW

DJIA ………. 13507...........13556...........7286
Nasdaq………. 2557............2572.............1114
S&P500…….. 1516............1522............776
CBOE Equity put/call 61............87-5/04........46-1/03

VIX ………. 13.3..........44 9/02........10.0-7/05

ISEE-call/put ……. 117...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-26...............91-5/04.........(81)-5/04
McClelSum…………… 563..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..54.3...........62.9-12/04......35-6/06
Bear:………… 20.7 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………37.4/38.6....n/a n/a
MarketVane Bulls…. 73......... 74..............24
IBD: Short Interest- ….7.46nh……7.46………. 4.0
Public/NYSE Spec.-…. 7.07………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………20.0/46.9
Bullish%- ……….…78...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBULL/BEAR. N(neutral)/N

*Insider corporate sellers 30:1
Sectors: Most Buyers: Finance
Most Sellers: Tech, Energy

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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ARE H&S TOPS RELIABLE?:

WELL, IT'S THE LIQUIDITY:

The frequency of the word "Liquidity" is currently rivalling the use of "Well," used by 99% of experts and other talking heads when beginning to answer questions on any topic (you can check it out).
After all, there are other reasons for this miraculous market rise - moderate p/es (thanks in part to stock buybacks and global profits), the fact that the U.S. market is 33% lower than global markets - thanks to Int'l sales S&P Q1 profits tripling estimates.
Mike Santoli in Barron's states that in the 95 trading days this year, 26 have seen $5B or more in M&A buyouts - on those days, the market rise was double the average - bear in mind that both the NYSE and NASDAQ markets combined only trade @ 3B shares a day.
Still, things seem to be cooling off and warning clouds are starting to appear in the breadth, Volume, and the Sentiment areas:
Divergences are starting to occur - DJIA vs. OTC; price vs. money flow and adv./decl. (1716 vs 1792 on the NYSE despite the huge runup).
Jason Goepfert of sentimentrader.com says that since 1940 this is only the 5th time new highs on the Dow occurred with negative breadth (Advance/Declines, etc.) - and it's happened 4 times this month.
While sentiment stays sluggishly in mid-range, bullish figures are rising slightly; and the Intermediate term signals such as Bullish percent, at 78%, and Market Vane at 72 warn that at least a summer correction is due.
Here are the stats:

Mktsentiment. 5/18/2007......5Yr.HI........ LOW

DJIA ………. 13556...........13556...........7286
Nasdaq………. 2558............2572.............1114
S&P500…….. 1522............1522............776
CBOE Equity put/call .57............87-5/04........46-1/03

VIX ………. 12.7..........44 9/02........10.0-7/05

ISEE-call/put ……. 129...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-18...............91-5/04.........(81)-5/04
McClelSum…………… 675..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..54.3...........62.9-12/04......35-6/06
Bear:………… 19.6 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………38.4/36.6....n/a n/a
MarketVane Bulls…. 72......... 74..............24

Birinyi Blogger
Bull/Bear Poll …………29.4/35.2
Bullish%- ……….…78...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBL/BR. N(neutral)/N

*Insider corporate sellers 17:1
Sectors: Most Buyers: Tech,Finance
Most Sellers: Tech, Finance

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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WELL, IT'S THE LIQUIDITY:

TW3:

Those of you older timers like me remember a TV comedy show called TW3 - That Was The Week That Was, or wasn't as in this case. Despite some volatility towards the end of last week, not much changed on the indicator view. The SPX (500) stayed right at 1505, off its all time high of 1527; the VIX also remained the same at 12.9; the McClellan indicators dropped slightly, as did the Bullish Per Cent (1 point).
The few changes included the AAII bull/bear from inverted favoring the bears to dead even , Birinyi's bloggers went more negative at 24 vs. 44.

Upcoming FYIs: I've been asked to give a presentation on how I use T/A for Options at the SF Options group at Fort Mason this Saturday at 9 a.m.; also next week Donald DeLutis is talking before the TSAA Tuesday at GGU on the Long Wave and Economic cycle.

Here are the Sentiment numbers:

Mktsentiment. 5/11/2007......5Yr.HI........ LOW

DJIA ………. 13326...........13326...........7286
Nasdaq………. 2562............2572.............1114
S&P500…….. 1505............1505............776
CBOE Equity put/call .57............87-5/04........46-1/03

VIX ………. 12.9..........44 9/02........10.0-7/05

ISEE-call/put ……. 122...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-2...............91-5/04.........(81)-5/04
McClelSum…………… 802..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..53.3...........62.9-12/04......35-6/06
Bear:………… 20.0 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….42.9/42.9....n/a n/a
MarketVane Bulls…. 74......... 74..............24

Birinyi Blogger
Bull/Bear Poll …………24.1/44.8
Bullish%- ……….…77...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBL/BR. N(neutral)/N

*Insider corporate sellers 44:1
Sectors: Most Buyers: Finance, Consumer svcs.,Energy
Most Sellers: Tech, Finance, Consumers,

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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TW3:

SINKO DE MAYO?:

Even though May has been the fourth best month for the market since 1990 ( after the trinity of Nov.Jan.), "Go Away In May" is still heard as we enter the bad semi-annual cycle : May-Oct. Up until this week money has been flowing slightly into Mutual Funds, an eventual sign of a top (nonsmart money) -the good news is that almost all of it has been going into overseas funds the past 5 weeks. Since the world funds are up 8.2% vs U.S. @ 6.5% that could reverse, if the dollar holds. More good news is that Asian central gov'ts are considering switching from only Treasuries into some equities for higher returns.
Other short term Bullish signs are the inverted Bull/Bear ratios from AAII (2 to 1) and Birinyi Bloggers. The CBOE put/call crept higher to 62, although the ISE is more gloomy. Other bad signs down the road are corporate insider selling back up to 40:1, especially tech stocks; and high levels of the McClellan Summation Index; the Bullish percent at 78 has only been higher once this decade (88). Also high is the Nasdaq to NYSE Volume, a sign of speculation that precedes a fall, although veteran Phil Roth stated in Barrons that tops are preceded by a flight to large cap quality (??).
Here are the numbers - the Spring TSAA Review has the 5-year highs/lows that preceded corrections:

Mktsentiment. 5/4/2007......5Yr.HI........ LOW

DJIA ………. 13264...........132640...........7286
Nasdaq………. 2572............2572.............1114
S&P500…….. 1505............1505............776
CBOE Equity put/call .62............87-5/04........46-1/03

VIX ………. 12.9..........44 9/02........10.0-7/05

ISEE-call/put ……. 151...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………5...............91-5/04.........(81)-5/04
McClelSum…………… 838..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..51.7...........62.9-12/04......35-6/06
Bear:………… 24.7 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….28.6/54.3....n/a n/a
MarketVane Bulls…. 72......... 74..............24

Birinyi Blogger
Bull/Bear Poll …………34.3/40.6
Bullish%- ……….…78...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBL/BR. N(neutral)/N

*Insider corporate sellers 40:1
Sectors: Most Buyers: Finance, Tech
Most Sellers: Tech (37% of Total);Healthcare, Finance, Consumers,

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

SINKO DE MAYO?:

M'Aidez, Mayday

I apologize for the tardiness of the sentiment blog, for reasons of vacation, nocturnal ignition on the East Bay Freeway, and trouble signing on to Blogger.com.
As Michael Kahn of Barron's and the new indicator I added (SentimenTrader) reveal, things remain neutral, ergo safe, for now.
The Rydex Nova/Ursa indicator went beserk (revised by Schaeffer), so I deleted that; the ISE has been bought by Deutschebank.
The reliable AAII contrary indicator is Bullish for the market at almost dead even, although the Market Vane is quite high. The longer term Bullish per cent is still at high levels (caution), but Insider Exec Selling jumped back up to a high 46:1 over Buyers.
Here are the numbers:

Mktsentiment. 4/27/2007......5Yr.HI........ LOW

DJIA ………. 13120...........13120...........7286
Nasdaq………. 2557............2557............1114
S&P500…….. 1494............1494............776
CBOE Equity put/call .61............87-5/04........46-1/03

VIX ………. 12.45..........44 9/02........10.0-7/05

ISEE-call/put ……. 114...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………-29...............91-5/04.........(81)-5/04
McClelSum…………… 839..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..51.1...........62.9-12/04......35-6/06
Bear:………… 26.1 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….39.2/38....n/a n/a
MarketVane Bulls…. 74......... 74..............24

Birinyi Blogger
Bull/Bear Poll …………33.3/33.3
Bullish%- ……….…78...............88 -2/04...... 46-8/04
SentimentTrader
Short/longterm Bl/Br. N(neutral)/N

*Insider corporate sellers 46:1
Sectors: Most Buyers: Finance, Tech
Most Sellers:, Healthcare,Finance, Consumers, Tech

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

M'Aidez, Mayday

THE C OF LIQUIDITY: CREDIT

The rationale for the invincibility of this market - endless amounts of liquidity from M&A, stock buybacks, hedge funds, private equity, ad nauseum, is beginning to be too commonplace. And several sentiment indicators are starting to flash caution signs. Those readers who receive my weekly e-mail alerts and tsaasf.org readers can observe a matrix of 5-year levels of indicators at market tops - a few are reaching that level now:
The CBOE Equity put/call ratio is 56, down 10 points from last week; the McClellan Summation Index is above 900, and the bull/bear surveys are being stretched toward complacency after triggering the recent bull move. In fact the Market Vane hit a new high of 74, and the Bullish per cent has risen to 77. Although Insider selling has backed off to 17:1, record short interest (up another 5% on the NYSE), specialist shorting and IBD's short interest are high also.

Here are those numbers:

Mktsentiment. 4/20/2007..5Yr.HI....LOW

DJIA ………. 12961...........12767...........7286
Nasdaq………. 2526............2515............1114
S&P500…….. 1484............1455............776
CBOE Equity put/call .56............87-5/04........46-1/03

VIX ………. 12.07..........44 9/02........10.0-7/05

ISEE-call/put ……. 125...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………13...............91-5/04.........(81)-5/04
McClelSum…………… 902..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..52.7...........62.9-12/04......35-6/06
Bear:………… 25.3 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….46.9/29.6....n/a n/a
MarketVane Bulls…. 74......... 74..............24

Birinyi Blogger
Bull/Bear Poll …………34.3/31.2
Bullish%- ……….…77...............88 -2/04...... 46-8/04

*Insider corporate sellers 17:1
Sectors: Most Buyers: Finance, Energy
Most Sellers: Consumers, Tech, Healthcare,Finance

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

THE C OF LIQUIDITY: CREDIT

When IRS Eyes 'R Smilin':

It's that taxing time again - Tuesday for Federal Income Taxes (due to D.C. holiday), but today for state taxes. IRS 2004 stats show that the top 1% of income earners receive 20% of income, but pay 40% of taxes; the bottom 50% earned 15% of total income but paid only 3% of total taxes - their Tax Freedom Day is January 29. So far no one is selling stocks to pay their taxes, as the market rises 100 points.
Last week's data showed very little change despite the expected positive action. NYSE new highs to lows remains at 10:1, and though @ 1/3 of these stocks are preferred, ADSs, or ETFs, most are still "stocks". As Jason Trennert points out in Barron's, things still look rosy as Supply of stocks diminishes with LBOs, M&As and stock buybacks by corps. holding cash but not using it for CapEx. Some are even borrowing via bonds, a la carry trade, to buy stocks, as Earnings Yield of 6.5% exceed low bond rates of 4.7%.
At some point this rally will roll over as the Dollar weakens along with the Economy - clouds on the horizon include some toppiness in market surveys, Bullish per cent, margin and short interest.
Here are the Sentiment numbers:

Mktsentiment. 4/13/2007......5Yr.HI........ LOW

DJIA ………. 12612...........12767...........7286
Nasdaq………. 2491............2515............1114
S&P500…….. 1452............1455............776
CBOE Equity put/call .66............87-5/04........46-1/03

VIX ………. 12.2..........44 9/02........10.0-7/05

ISEE-call/put ……. 122...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………17...............91-5/04.........(81)-5/04
McClelSum…………… 834..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..49.5...........62.9-12/04......35-6/06
Bear:………… 27.5 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….40.9/38.0....n/a n/a
MarketVane Bulls…. 72......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………34.3/31.2
Bullish%- ……….…73...............88 -2/04...... 46-8/04

*Insider corporate sellers 19:1
Sectors: Most Buyers: Industrials, Tech
Most Sellers: Consumers, Tech

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

When IRS Eyes 'R Smilin':

MONEY MAKES THE MARE GO:

What drives the stock market -Sentiment or Liquidity? In this case, both look favorable for the short run. Barron's states Private Equity is sitting on $300B cash, or $1T if levered to Reg T. margins. That, with loads of MMF cash is chasing fewer shares, as KKR, Citi and Tracinda get in the buyout mood.
Breadth also looks strong as Barron's cumulative A/D chart goes straight up (my cum A/D just broke 100,000 for the very first time). Although the two 9:1 Up/Down Volume days recently are still in play, last week only saw between 1:1 to 4:1 over the 4 days.
Although a few indicators such as McClellan Oscillator and Bullish % are edging up to a short term toppy area, Notable Numbers include an inverse AAII Bull/Bear ratio of 32:39 (rare Bullish stat).
I found disagreement in a couple data sources: Barron's Insider Trading chart from Thomson (with exceptions in the fine print) show a Bullish "under 12" reading, but the parent Co., WSJ itemized a 28:1 Selling ratio of Key employees. Also, Schaeffer's CBOE put/call shows 53 a/o Friday - CBOE shows 63, still down from the prior week.
Here are the numbers:
Mktsentiment. 4/6/2007......5Yr.HI........ LOW

DJIA ………. 12560...........12767...........7286
Nasdaq………. 2471............2515............1114
S&P500…….. 1443............1455............776
CBOE Equity put/call .63............87-5/04........46-1/03

VIX ………. 13.2..........44 9/02........10.0-7/05

ISEE-call/put ……. 126...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………30...............91-5/04.........(81)-5/04
McClelSum…………… 755..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..50.6...........62.9-12/04......35-6/06
Bear:………… 25.6 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….32.3/39.8....n/a n/a
MarketVane Bulls…. 71......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………33.3/30.0
Bullish%- ……….…72...............88 -2/04...... 46-8/04

*Insider corporate sellers 28:1

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

MONEY MAKES THE MARE GO:

SPRING HOPES ETERNAL:

Possibly a contrarian indicator, mutual fund inflows for both stocks and bonds were huge for January and February, per ICI. Weekly Declines beat out Advances by 400, but NY new highs were 8:1. Key insider selling again rose to 30:1 over buyers (doubling last week), with Techs, Consumer Services and Energy leading the way - leading buyers were in the Energy (also) and Finance sectors.
Standard & Poors Tech Analyst - Arbeter, sees a 16% rise this summer, with April historically being the best month of the year, per Stock Trader's Almanac. Nota bene, the 9-1 Up/Down Volume factor twice recently.
Nasdaq short interest rose 12% last month to a record. Plenty of bricks abound in the Wall of Worry. One number I regard as suspect is the recent IBD Public to Specialist shorting almost doubling its old high to 12.4 - this may be a bad number, and one to shelve for awhile.
Here are the weeklies:
Mktsentiment. 3/30/2007......5Yr.HI........ LOW

DJIA ………. 12354...........12767...........7286
Nasdaq………. 2422............2515............1114
S&P500…….. 1421............1455............776
CBOE Equity put/call .72............87-5/04........46-1/03

VIX ………. 14.64..........44 9/02........10.0-11/06

ISEE-call/put ……. 94...........299-12/04.......68 - 3/9/07
(>200/Bearish)

McClel Osc……………0...............91-5/04.........(81)-5/04
McClelSum…………… 660..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..48.4...........62.9-12/04......35-6/06
Bear:………… 27.5 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….43.9/33.1....n/a n/a
MarketVane Bulls…. 70......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………30.3/30.3
Bullish%- ……….…71...............88 -2/04...... 46-8/04

*Insider corporate sellers 30:1

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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SPRING HOPES ETERNAL:

REGRESSING TO THE MEAN:

Many of the Sentiment Indicators resumed fell back to their neutral stance after 5 days of Up action. The WSJ does a nice job of highlighting Sector and Total Insider Trading each week by key employes; last week it bumped up to 15 Sellers (to 1 Buyer) - up from 12, but down hugely from 50 and 60:1 last winter. Heaviest sectors were Consumer Services, Basic Materials, and Energy. Moneycenter.msn.com has data on this subject, as does insiderscore.com, which charges a fee.
The markets did a nice job of bouncing off major support levels during the correction: the Nasdaq hit exactly the 38.2% Fibonacci retracement of the July advance at 2332, as did the SPX at its 1387 close. The DJIA almost reached the 50% level of 11,766 but stopped at previous horizontal support near 11,950. Breadth and Money Flow are again strong making it doubtful that we retest those lows this time. We are still in the optimal IRA/Pension inflow season, and the previously mentioned 10:1 Up/Down Volume days (2 within 30 days) bode for an average of 22% rise by mid-May, barring a catastrophic event.
The only notable extremes last week were a 10:1 New High/New Low ratio, and a counterbalancing negative of bouncing down off the 50 level on the McClellan Oscillator (ratio adjusted).

Mktsentiment. 3/23/2007......5Yr.HI........ LOW

DJIA ………. 12481...........12767...........7286
Nasdaq………. 2448............2515............1114
S&P500…….. 1436............1455............776
CBOE Equity put/call .65............87-5/04........46-1/03

VIX ………. 12.95.........44 9/02........10.0-11/06

ISEE-call/put ……. 113...........299-12/04.......68 - 3/9/07
(>200/Bearish)

McClel Osc..........……45...............91-5/04.........(81)-5/04
McClelSum…………… 634..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..46.6...........62.9-12/04......35-6/06
Bear:………… 28.4 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….43.9/33.1....n/a n/a
MarketVane Bulls…. 69......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………32.4/35.1
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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REGRESSING TO THE MEAN:

BEWARE THE IDES OF MARCH!:

Despite today's 100+ upday following the quadwitch expiry, based on lower highs and lows we are still in a negative, correctional downtrend, with Resistance and Support between the 50- and 200-day MAs and horizontal Resistances/Supports at 12,335 and 11,953 on the DJIA.
Huge ETF inflows last week of $10B add to the Contrarian's delight, although some notable Bullish stats include a CBOE put/call ratio of 84 (near the 5 year high of 87), and the AAII Bull/Bear inversion of 33/45.
The Birinyi Bull/Bear bloggers poll reversed from 42.1% Bears to Bulls. Meanwhile, Money Market Funds are at record high levels of $2.4T.

Mktsentiment. 3/16/2007......5Yr.HI........ LOW

DJIA ………. 12110...........12767...........7286
Nasdaq………. 2372............2515............1114
S&P500…….. 1386............1455............776
CBOE Equity put/call .84............87-5/04........46-1/03

VIX ………. 16.79.........44 9/02........10.0-11/06

ISEE-call/put ……. 96...........299-12/04.......82-4/02
(>200/Bearish)

McClel Osc.(+75/-100)……-9...............91-5/04.........(81)-5/04
McClelSum…………… 436...........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..45.5...........62.9-12/04......35-6/06
Bear:………… 28.9 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….33/45.4....n/a n/a
MarketVane Bulls…. 65......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………42.1/13.2
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

Subscribe in a reader

BEWARE THE IDES OF MARCH!:

CALM AFTER THE STORM:

The sharp decline seems to have had the desired effect of eliminating a lot of complacency in the markets, so far. Barring some exogenous event, such as a Japanese Yen carry trade scare or a hedge fund/ housing market jolt, the B corrective wave is on track, slightly upward.
The outstanding Sentiment Indicators that reflect bearish caution (read Bullish) include the CBOE put/call ratio at a very high 80, and the inverted ISEE call/put at a low 68.
The Investor Intelligence survey is stuck in neutral but the AAII numbers are pleasantly inverted even further than last week at 35.8 vs. 44.9.
The new Birinyi poll is also inverted at 29 bulls/42 bears and corporate key sellers are way down to 12:1 from a recent high of 60:1.
Dissenting statistics for the Intermediate term include a declining New High/New Low ratio and the Bullish per cent - since 2000 only 2 of 16 sell signals have stopped at 4 "Os" on the Pt.& Fig. chart, which is where we are now.
Here are the numbers:

Mktsentiment. 3/9/2007......5Yr.HI........ LOW

DJIA ………. 12276...........12767...........7286
Nasdaq………. 2387............2515............1114
S&P500…….. 1402............1455............776
CBOE Equity put/call .80............87-5/04........46-1/03

VIX ………. 14.1.........44 9/02........10.0-11/06

ISEE-call/put ……. 68...........299-12/04.......82-4/02
(>200/Bearish)

McClel Osc.(+75/-100)……-6...............91-5/04.........(81)-5/04
McClelSum…………… 478...........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..46.2...........62.9-12/04......35-6/06
Bear:………… 26.9 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….35.8/44.9....n/a n/a
MarketVane Bulls…. 65......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………28.9/42.1
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

CALM AFTER THE STORM:

THE LION ATE THE LAMB:

We didn't have to wait long to see March revealed. With many indexes and sentiment indicators at or near new highs, the rug got pulled out by - a)China, b)Alan G c) hedge funds.
This week starts with some stellar reversals - the CBOE put/call at a huge 79% puts and the McClellan at an oversold level below 50 at -68. Although the inv.Intell surveys barely budged, the kneejerk AAII actually inverted to a 36 Bull/39 Bear Buy signal, at least short term. Also notable is the record high Public to NY Specialist shorting, now indicating the guys closest to the action aren't too worried.
Still negative for the intermediate term - Bullish per cent at 73, as 3-box pt.& fig. sell sign, and the McClellan Summation high at +690.
Here are the recent numbers:

Mktsentiment. 3/2/2007......5Yr.HI........ LOW

DJIA ………. 12114...........12767...........7286
Nasdaq………. 2368............2515............1114
S&P500…….. 1387............1455............776
CBOE Equity put/call .79............87-5/04........46-1/03

VIX ………. 18.6.........44 9/02........10.0-11/06

ISEE-call/put ……. 91...........299-12/04.......82-4/02
(>200/Bearish)

McClel Osc.(+75/-100)……-68...............91-5/04.........(81)-5/04
McClelSum.(+750/-1153nh) 690...........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..50.5...........62.9-12/04......35-6/06
Bear:………… 24.2 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ……….36.6/39.6....n/a n/a
MarketVane Bulls…. 65......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………32.4/29.7
Bullish%- ………73...............88 -2/04...... 46-8/04

*Insider corporate sellers 35:1, up from 20:1 in Nov.

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

THE LION ATE THE LAMB:

MARCH - LION OR LAMB?:

Despite a slightly negative (so far) February, which is usually the 2nd worst month of the year, a feeling of toppiness still exists: thanks to Finance, Healthcare and Tech sectors, insider selling by key employees keeps rising, to over 1B shares vs. 17M, a ratio of 60:1.
Money Market Funds rose to a record $2.36T while margin debt surpassed the March 2000 high of $276B at a current $285B on the NYSE.
On CNBC, Ken Tower advises to watch Volume and Breadth (new highs) in the next rally after this current decline. The gov't is forecasting a possible Surplus by '08 (election time) due to the great prosperity from its tax cuts, so Income Taxes might give the market a boost this Spring.I
n spite of the week's decline (except for the Nasdaq at new recent highs), breadth got even stronger, with A/D and new highs/lows increasing; fund inflows increased, at least in the ETF zone.
Still at disturbingly toppy levels, however, are the Bullish per cent, at 79 the highest since Feb. '04, at a top that prevailed for a year; Market Vane pollees climbed to a high 73% Bulls, as did the AAII, at 54 to 22 ursine types.
Here are the weekly numbers:
Mktsentiment. 2/23/2007......5Yr.HI........ LOW

DJIA ………. 12647...........12767...........7286
Nasdaq………. 2515nrh............2515............1114
S&P500…….. 1451............1455............776
CBOE Equity put/call .68............87-5/04........46-1/03

VIX ………. 10.5.........44 9/02........10.0-11/06

ISEE-call/put ……. 101...........299-12/04.......82-4/02
(>200/Bearish)

McClel Osc.(+75/-100)……-10...............91-5/04.........(81)-5/04
McClelSum.(+750/-1153nh) 904...........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..50...........62.9-12/04......35-6/06
Bear:………… 22.2 .........38.2-3/03.......16-6/03

AAII-Bull/Bear …….53.9/22.3....n/a n/a
MarketVane Bulls…. 73......... 73..............24

Birinyi Blogger
Bull/Bear Poll …………32.4/29.7
Bullish%- ………79...............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

MARCH - LION OR LAMB?: