WEaKLY MARKET UPDATE:

Although the markets ended the week about where they began, it was quite a ride: some notable climactic extremes included the VIX up to the high 30s, the NYSE and Nasdaq new highs/lows at 1:20 and 1:50, respectively; all surveys of bulls to bears indicated more Bearish ON the market (Bullish FOR the market).
Public to Specialist shorting hit a new record high of 19.88, and the Bullish per cent went to a BUY signal ( up 3 two-point boxes, or 6%) at 25. Money market inflows were a high $57B.
In a normal market cycle all of these oversold readings would indicate a sustainable rally, but under present circumstances they do not.

MktSentiment. 1/25/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12207……….12099………..14093..............7286
Nasdaq………. 2326………..2340…………2810.............1114
S&P500…….. 1330………..1325…………1561………..776
CBOE Eq. put/call …68………….92……………..92-1/08…..........46-1/03

VIX ………. 29…………..27.2…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 68…………75nh……………75(bullish)….31(bearish)
McClel Osc…………0……………-44……………91-5/04 br......(81)-5/04bu
McClelSum………-500…………..-451…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…41.6………….45.6………..62.9-12/04br......35-6/06bu
Bear:………… 31.5…………26.7………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……25.1/59………24.3/54.4……..n/a n/a
MarketVane Bulls…40…………….47…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …8.87……….8.6……………10………. 4.0
Public/NYSE Spec.-…19.88……….12…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………24/44………48/43
Bullish%- …………..25………19nl……….…88 -2/04br.....19bu
*Insider corporate sellers..7……….6………..97…………..6
Sectors: Most Buyers: Energy
Most Sellers: Healthcare (1/3 of total sellers)

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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WEaKLY MARKET UPDATE:

TOO LATE TO SELL,

TOO EARLY TO BUY - Words of wisdom from Jim Awad on CNBC last week.
Sentiment improved slightly over the past period, but, like oscillators, oversold readings can be difficult to time. Although we have not yet had the "capitulation" of bulls, as measured by the VIX, Volume in a Selling Climax, Blood in the Streets headlines, etc., there some very extreme levels being reached:
The CBOE Equity put/call ratio hit a high of 92 last week.
Bullish Per Cent hit a new low of stocks on a Buy signal - 12%
McClellan Oscillator hit its recent envelope low of 43, although both it and its concomitant Summation Index,now only -451, have been much lower.
The VIX, now 27, could re-reach the high 30s again.
A new indicator, odds of a Recession in '08, which is Bullish when high, hit a new high of 75.

Here are the numbers:

Mktsentiment. 1/18/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12099……….12606………..14093..............7286
Nasdaq………. 2340…………2439…………2810.............1114
S&P500…….. 1325………..1401…………1561………..776
CBOE Eq. put/call …92…………78……………..92-1/08…..........46-1/03

VIX ………. 27.2…….…..23.6…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 75nh…………63……………75(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-44…………..-2……………91-5/04 br......(81)-5/04bu
McClelSum………-451…………..-357…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…45.6…………48.8………..62.9-12/04br......35-6/06bu
Bear:………… 26.7…………25.8………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……24.3/54.4…….19.6/58.9……..n/a n/a
MarketVane Bulls…47…………….48…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …8.6………..9.43………. 4.0
Public/NYSE Spec.-…12………….14.6…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………48/43..………45/41
Bullish%- ………12nl…………..31nl……….…88 -2/04br.....12bu
*Insider corporate sellers..6………….8………..97…………..6
Sectors: Most Buyers: Consumer Svc.
Most Sellers: 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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TOO LATE TO SELL,

FAUX HUNT:

Under normal circumstances the extremes of a few Sentiment Indicators from last week would be calling for a huge oversold rally - however, given the sorry state of the technical and fundamental conditions ( of the markets and global economy, respectively) more time and evidence is needed. Considering that, the best that might be hoped for is a short-covering rally up to previous support-turned-resistance and the 200MA lines.
In addition to the sorry beginning of 2008, mid-month in January is when Pension money ( and whatever bonuses given) enter the market. Anecdotally, in a study I did of option expiry weeks - of the past 32 months only 5 times was the SPX lower on Friday's close than 3 days earlier; however, 2 of the five occurred in the past quarter, and prior to the 32 months, only 1 in 10 had been up, indicating that up and down cycles do exist.
Extremes from last week include the AAII survey with under 20% Bulls and 58% Bears, a recent high; (legal) Insider Selling remains single-digit low with the CEOs buying Finance and selling healthcare (nearly 1/3 of all Sectors' sales).
Bullish per cent is on a huge Buy signal of only 31%, a new low; Specialist shorting is near a record high at 14.6%, with short interest close behind. Money market inflows were $48Billion, the same amount as Dec.7, the day before this last downleg started (wave C of a 5-3-5 corrective downdraft).

Mktsentiment. 1/11/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12606………..12800………..14093..............7286
Nasdaq………. 2439…………2504…………2810.............1114
S&P500…….. 1401…………1411…………1561………..776
CBOE Eq. put/call …78…………..68……………91-8/07…..........46-1/03

VIX ………. 23.6…………23.9…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 63……………64nh……………64(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-2…………….-23……………91-5/04 br......(81)-5/04bu
McClelSum………-357……………-336…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…48.8…………52.2………..62.9-12/04br......35-6/06bu
Bear:………… 25.8…………24.5………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……19.6/58.9…….25.7/55.2……..n/a n/a
MarketVane Bulls…48……………55 …………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …9.43………10.0nh….……9.86………. 4.0
Public/NYSE Spec.-…14.6………..12.1…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………45/41………45/41
Bullish%- ………31nl………….38……….…88 -2/04br.....36bu
*Insider corporate sellers.8……….7………..97…………..6
Sectors: Most Buyers: Finance,Energy
Most Sellers: Healthcare (30% of all Sectors)

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

FAUX HUNT:

DON'T BEARS HIBERNATE IN WINTER?:

When President Bush says the Economy is "stable" does he mean it is where they keep the horses? Intrade.com, the odds-betting website, puts Recession odds at a recent high of 64, which, contrarily, is Bullish for the stock market. As the Chinese symbol (and veteran market pundits) indicate, Crisis also means Opportunity!
Fundamentals indicate a similarity to 1929 (worst 3 market days since then), 1987, and the Japanese meltdown: Record high Oil, Gold, Grains. Farmland has peaked and is dropping. Financials are in leverage trouble, and there was an "Echo" crash @ 6 years after the big one - 1937, 1980, 1994. The dollar was falling due to budget and trade deficits. Market breadth was and is terrible, both A/D and New Highs.
Although optimists point out that there is just under $1T in SWFs (soveriegn wealth funds), the questions remain - do they want to put there money here, or in emerging and developing markets; do they want real estate or stocks, and do we want Communist China and Muslim Mid-East to take even minor stakes in our companies?
Fortunately, on the Sentiment side, there are Bullish signs - Bearish ON the market, Bullish FOR the market:
The CBOE put/call ratio of 68 is quite high; surveys show higher Bear numbers -55% for AAII; Public to "remaining" Specialists' shorting and short interest are at record or near record highs. CEO legal insider selling is low, at 7 last week, and unsmart money (Mutual Funds) continue to show outflows, into money market funds.
Finally, old reliable Bullish per cent is at 38%, a buying area (although it remains on a sell signal).
Here are the numbers:
Mktsentiment. 1/04/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12800………..13366………..14093..............7286
Nasdaq………. 2504………….2674…………2810.............1114
S&P500…….. 1411…………1478…………1561………..776
CBOE Eq. put/call …68…………..62……………91-8/07…..........46-1/03

VIX ………. 23.9…………20.7…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 64nh………….48……………64(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-23……………5……………91-5/04 br......(81)-5/04bu
McClelSum………-336…………….-313…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…52.2………….54.9………..62.9-12/04br......35-6/06bu
Bear:………… 24.5…………23.1………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……25.7/55.2……..30/50……..n/a n/a
MarketVane Bulls…55…………….n/a…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …10.0nh…….9.86nh….……9.86………. 4.0
Public/NYSE Spec.-…12.1………..10.4…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………45/41………48/30
Bullish%- ………38……………46……….…88 -2/04br.....36bu
*Insider corporate sellers.7………..15:1………..97…………..6
Sectors: Most Buyers: Healthcare, Finance (50% of total)
Most Sellers: Tech, Healthcare (50%)

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

DON'T BEARS HIBERNATE IN WINTER?:

APPLE- A CORE HOLDING?:

My yearend prediction for '08 (or longer) is a Black Swan event that might hit Apple Computer. I saw a comparison picture on TV of a young person's inner ear before and after using and abusing an iPod, with volume to the max in noisy places. It was not pretty, and I wondered how long it would take for the class action lawyers to circle and attack like they did with cigarette makers. It could be the excuse to bring apple back into the double-digits.
The overall market is a different story. Dan Sullivan of The Chartist cites the Specialist shorting (those that are left) is the 3rd lowest in 5 years, and short interest is at record levels.
My indicators show Bullish numbers coming off lows in UBS Investor Confidence and CEO insider selling; and the Market Vane polling shows even more inverted Bull/Bear ratios.
Finally, well over half of insider buying is again in the financial area - 15M shares of the total 25M; sellers also include finance, along with tech and energy.
Here are the numbers:
Mktsentiment. 12/28/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13366………..13450………..14093..............7286
Nasdaq………. 2674………….2692…………2810.............1114
S&P500…….. 1478………….1484…………1561………..776
CBOE Eq. put/call …62……………60……………91-8/07…..........46-1/03

VIX ………. 20.7………….18.5…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 48……………42……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………5…………….16……………91-5/04 br......(81)-5/04bu
McClelSum………-313………….-415…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…54.9………….56.5………..62.9-12/04br......35-6/06bu
Bear:………… 23.1………….22.4………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……30/50…………35.9/47.2……..n/a n/a
MarketVane Bulls…n/a……………56…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …9.86nh…….8.87….……9.86………. 4.0
Public/NYSE Spec.-…10.4………..10…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………48/30………52/32
Bullish%- ………46……………52……….…88 -2/04br.....36bu
*Insider corporate sellers.15:1……11:1………..97…………..6
Sectors: Most Buyers: 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

Subscribe in a reader

APPLE- A CORE HOLDING?: