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

Subscribe in a reader

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

Subscribe in a reader

JANUARY EFFECT LIGHT (ECHO):