Monday, February 4, 2008

BEAR TRAP?:

URSUS HORRIBILIS of 2000 had 16 of them, usually lasting a month and ranging 5% (the one last week was 5 to 6%), according to the recent Barron's. Today's overbought decline was not entirely unexpected , considering light Resistance and a McClellan Oscillator reading of 79, up from zero a week ago.
There is still a potential for upside momentum ahead, considering the hugely oversold nature of the indicators such as Bullish Per Cent, now only at 36; surveys still far from complacent - as are put buying and shorting. Corporate insider selling is at a new low of 4.8%, with nearly 1/2 the buyers in Finance stocks.
Below are the numbers:

MktSentiment. 2/1/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12743………12207………..14093..............7286
Nasdaq………. 2413………..2326…………2810.............1114
S&P500…….. 1395………..1330…………1561………..776
CBOE Eq. put/call …63………….68……………..92-1/08…..........46-1/03

VIX ………. 24………….29…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 69…………..68……………75(bullish)….31(bearish)
McClel Osc…………79…………..0……………91-5/04 br......(81)-5/04bu
McClelSum………-255…………-500…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…40.2…………41.6………..62.9-12/04br......35-6/06bu
Bear:………… 32.2…………31.5………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……30.1/48.9……..25.1/59……..n/a n/a
MarketVane Bulls…46……………40…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …8.39………..8.87……………10………. 4.0
Public/NYSE Spec.-…16.26……….19.88…………19.88bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………27.2/40.9……24/44
Bullish%- …………..36………..25……….…88 -2/04br.....19bu
*Insider corporate sellers..5……….7………..97…………..5
Sectors: Most Buyers: Finance (1/2 total)
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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