Nonetheless, this Bear Rally before more downside hasn't exhausted itself, in percentage points or in time, according to the dozen or so similar rallies over decades of Bear markets. Many of the indicators have backed off very oversold areas, leading to end-of-month profittaking. The McClellan Oscillator shot up through the 50 level to near 70 (overbought) before settling down for the week at +37; and its concomitant Summation broke up into negative triple-digit territory from over -1,000; public to specialist shorting and NYSE short interest hit new highs. Both ETFs and traditional mutual funds saw Billions in redemptions; newsletter surveys improved, but still remain inverted (bullish FOR the market).
This week I have deleted the indicator of most legal insider sales/buys by sector, but have discerned that the overall rate of this selling in the 10 sectors is quite revealing: looking at the tops and bottoms over the past 2 years (more sampling would be preferable), 6 of the 7 bottoms saw overall ratios at between 4 and 8 to 1 (with one at 12:1) - as for the tops, 8 of 9 were between 18 and 43 to 1, with one outlier at 5:1, although that was a declining top. This unusual statistic bears watching.
Here are the numbers:
MktSentiment. 7/25/2008 Prev. Week.....5Yr.HI......LOW
DJIA ………. 11370……….11496………..14093............7286
Nasdaq………. 2310…………2282…………2810.............1114
S&P500…….. 1257…………1260………….1561………..776
CBOE Eq. put/call …72……………79……………..92-1/08….....46-1/03
VIX ………. 22.9………….24.0…….…….44.. 9/02 bu..10.0-7/05 br
McClellan Osc……….37…………15……………91-5/04 br...(-81)-5/04bu
McClelSum……….…-967………-1187…………..1568-6/03.......-917
Newsletter Surveys:
Inv.Intel -Bull:…..…29.2………..27.8……….…12/04br......35-6/06bu
Bear:………… 49.4……….48.9…..………… 38.2-3/03.......16-6/03
AAII-Bull/Bear ……35.8/44…….25.0/58.1……..n/a n/a
IBD: Short Interest- 13.5………..13.4…………15.0………. 4.0
Public/NYSE Spec.-…21.9nh……18.45…….….21.9bl…………..1.0br
Bullish%- …………42………..34buy…….…88 -2/04br.....19bu
*Insider corporate sellers.20:1…….8:1………..97………….4
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