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

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When IRS Eyes 'R Smilin':