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: