For most of 2009 I have been developing an alternative strategy to the Zero Interest Rate policy that Fed Chairman Bernanke is implementing "for an extended period", penalizing the prudent investor used to Treasurys, CDs, etc., and driving them into riskier investment "bubbles". Briefly, this strategy involves exposure in the stock market with a safety net and additional return derived from In-The-Money covered calls on quality stocks with 3% dividends or greater, approaching a total double-digit return while providing some safety for the individual stock or market well below the current prices.
I will be reprising my initial talk to the SF Options group this month - December 19. Anyone wishing a copy of the presentation can e-mail me at: leonbrnt@aol.com.
Meanwhile, the Sentiment picture appears mixed, with NYSE new highs over 500 and downturns being met with buyers; on the downside, the Inv.Intell. Bears dropped to a record low of 16 (June of 2003), and mutual fund investors are abandoning stocks for bonds.
Here are the numbers:
| MktSentiment | Last Week | Prev. Week | 5 Year Hi | 5 Year Low |
| DJIA: | 10388 | 10309 | 14093 | 6626 |
| Nasdaq: | 2194 | 2138 | 2126 | 1114 |
| S&P 500: | 1105 | 1091 | 1561 | 683 |
| CBOE Eq. put/call: | 61 | 58 | 96-10/08 | 46-1/03 |
| VIX: | 21.3 | 24.7 | 90 | 8.8 |
| McClellan Osc: | 23 | -28 | 108 | -100 |
| McClellan Sum: | 444 | 393 | 1568 | -1514 |
| Newsletter Surveys | ||||
InvestorsIntel.Bull: | 50.0 | 50.6 | 63 | 22.21 |
InvestorsIntel.Bear: | 16.7 | 17.6 | 54.4 | 16 |
AAII Bull: | 41.6 | 41.7 | n/a | n/a |
AAII Bear: | 33.7 | 31.8 | n/a | n/a |
| Nova/Ursa Mutual Funds: | 0.56 | 0.70 | 2.2 | 0.56 |
| Mutual Fund Flows: | n/a | -.9B | ||
| Money Market Flows | -8.4B | -7.8B | ||
| ETF equity:Monthly Totals | Oct.691B | Sep.$580B | ||
| Baltic Dry Index: | 4107 | 3974 | 11700 | 663 |
Bullish %: | 74 | 76 | 88 | 2 |
| Insider Corporate Sellers: | 26:1 | 26:1 | 108:1 | 2.4:1 |
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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