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

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SURGIN' GENERAL: