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

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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