MAY: GO AWAY AND STAY AWAY ! :

After the worst May since 1962 (almost 50 years) a little sunlight shone through the clouds.

Although the QQQs Insider selling was 231 to 3 buyers, total CEO Insider selling was only 2:1 from 22:1 the previous week. The Advance / Declines got back to being positive, although New Highs to Lows remained negative.
The McClellan Summation Index (cumulative of the Oscillator readings) went below the zero line for the first time since March 9, 2009, a day that will go ........; and the AAII Bears broke up through the 50 level for its first time since last November (before that July and March '09).

For what it's worth, the Baltic Dry Index went to a recent high of 4078 - a proxy for the global economy, despite Europe's woes; and the Bullish per cent went on a BUY signal (up 3 boxes on the Pt.& Fig. chart) to 48, but not exactly off extreme oversold levels.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10136	10193	14093	6626
Nasdaq:	2257	2229	2805	1114
S&P 500:	10897	1087	1561	683
CBOE Eq. put/call:	59	81	96-10/08	46-1/03
VIX:	32.1	40.1	90	8.8
McClellan Osc:	-14	-91	108	-123
McClellan Sum:	-230	53	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	39.3	43.8	63	22.21
InvestorsIntel.Bear:	29.2	24.7	54.4	16
AAII Bull:	29.8	41.3	n/a	n/a
AAII Bear:	50.9	33.7	n/a	n/a
Nova/Ursa Mutual Funds:	1.03	0.98	2.2	0.56
US Equity-1 week lag	n/a	-4.8B
Money Market Flows	5B	-33B
ETF equity:Monthly Totals	Apr.831B	Mar.805B
Baltic Dry Index:	4078	3608	11700	663
Bullish %:	48	45	88	2
Insider Corporate Sellers:	2:1	22:1	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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MAY: GO AWAY AND STAY AWAY ! :

WHERE'S THE PPT?:

If there is such a thing as the Plunge Protection Team, which I fully believe has been on the job for half a century or so, they were conspicuously absent the past few weeks. Either they were on vacation or just did not like what the Congress was doing to their playground - but they pulled their Bids like a High Frequency Trader computer.

I was rather dubious when, in mid-January at the TSAA monthly meeting, Martin Pring bravely forecasted an upmove for the markets short term, but by mid-summer the DJIA would be about 14% BELOW the January 1 level of 10,428 - or around the 9,000 level.

Other technicians have also supported this view, such as Arch Crawford, Tom McClellan, Bill Gibson, John Roque, Volume Reversal's Mark Liebovit, and Peter Eliades -all with varying but similar scenarios.

Meanwhile all the Fundamental Analysts and Economists are calling for a minimum of 10% higher by the end of 2010 - which could very well happen.
Meanwhile, I remain defensive, relying on my DITM strategy (for more please see www.brentleonard.com), which has consistently returned the 100-year market average of around 10% with a safety net.

My view is based on the nesting of cycles, from the 18-year double cycle, the 10-year zero year, the very reliable 4-year Presidential cycle, the semi-annual "Sell in May" cycle - plus other technical signals such as the failed Santa Claus rally and the January Barometer.

Last week's extemes included the CBOE put/call ratio - jumping 20 points to 81, and the VIX jumping up 10. The McClellan Oscillator is oversold at minus 91, while breadth, based on Advance/Declines on the NYSE and Nasdaq were at least 1 to 10.

Here is the complete list:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10193	10620	14093	6626
Nasdaq:	2229	2346	2805	1114
S&P 500:	1087	1135	1561	683
CBOE Eq. put/call:	81	62	96-10/08	46-1/03
VIX:	40.1	31.2	90	8.8
McClellan Osc:	-91	-44	108	-123
McClellan Sum:	53	542	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	43.8	47.2	63	22.21
InvestorsIntel.Bear:	24.7	24.7	54.4	16
AAII Bull:	41.3	36.6	n/a	n/a
AAII Bear:	33.7	36.6	n/a	n/a
Nova/Ursa Mutual Funds:	0.98	1.19	2.2	0.56
US Equity-1 week lag	n/a	-8.6B
Money Market Flows	-33B	24B
ETF equity:Monthly Totals	Mar.805B	Feb.750B
Baltic Dry Index:	3608	3608	11700	663
Bullish %:	45	63	88	2
Insider Corporate Sellers:	22:1	15:1	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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WHERE'S THE PPT?:

SATURATED WITH OIL AND GREECE ! :

Sentiment Indicators have been trumped by overwhelming coverage of problems in the Gulf and Europe - you might say the market is "rigged". Especially after 60 Minutes' hatchet job on BP et.al. last night. International exposure to Europe and oil stocks have launched the overdue correction with no end in sight. And with option exasperation this week we could expect more reversals of positions.

Although breadth last week remained strong - boding well for a minor correction- we still continue down today. For the first time since early January funds flowed IN to Money Markets, not out; and out of US equity funds for the first time in a month. The Bullish per cent remains rightfully on a Sell signal while the McClellan Oscillator is now oversold.

Here are the statistics:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10620	10380	14093	6626
Nasdaq:	2346	2265	2805	1114
S&P 500:	1135	1110	1561	683
CBOE Eq. put/call:	62	69	96-10/08	46-1/03
VIX:	31.2	41.0	90	8.8
McClellan Osc:	-44	-123	108	-123
McClellan Sum:	542	768	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	47.2	56.0	63	22.21
InvestorsIntel.Bear:	24.7	18.7	54.4	16
AAII Bull:	36.6	39.1	n/a	n/a
AAII Bear:	36.6	28.6	n/a	n/a
Nova/Ursa Mutual Funds:	1.19	1.02	2.2	0.56
US Equity-1 week lag	n/a	-2.2B
Money Market Flows	24B	-19B
ETF equity:Monthly Totals	Mar.805B	Feb.750B
Baltic Dry Index:	3608	3608	11700	663
Bullish %:	63	61	88	2
Insider Corporate Sellers:	15:1	52:1	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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SATURATED WITH OIL AND GREECE ! :

BLACK SWAN DIVE:

Once again (going back to 1987) the Quants were surprised by the failure of their algorithms, causing yet another hiccup in an overbought condition. Coincidentally, I have been reading the excellent book - The Quants- by Scott Patterson, which in very readable narrative style describes the '08 meltdown, so similar to last week's.

As noted here last week, there were huge extremes in breadth and sentiment indicators, and, as in 1987, there were no backstops (such as Specialists and Market Makers) in the ECNs to make orderly markets by hitting the bids.

Since the newsletter surveys come out midweek, they did not factor in the excesses of Thursday, but end-of-week stats such as the McClellan Oscillator, at -123 and a CBOE put/call ratio of 69 posited that after the weekend there might be a rally, if one dared. Although new highs still bested new lows, the A/D for the week was a stunning 150 to 3078!

Finally, the Bullish per cent dropped over 20 points on the Pt.& Fig. charts, for a Sell signal - falling to 61.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10380	11008	14093	6626
Nasdaq:	2265	2461	2805	1114
S&P 500:	1110	1186	1561	683
CBOE Eq. put/call:	69	52	96-10/08	46-1/03
VIX:	41.0	22.0	90	8.8
McClellan Osc:	-123	-32	108	-123
McClellan Sum:	768	1133	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	56.0	54.0	63	22.21
InvestorsIntel.Bear:	18.7	18.0	54.4	16
AAII Bull:	39.1	41.4	n/a	n/a
AAII Bear:	28.6	28.6	n/a	n/a
Nova/Ursa Mutual Funds:	1.02	1.19	2.2	0.56
US Equity-1 week lag	n/a	.25B
Money Market Flows	-19B	-6B
ETF equity:Monthly Totals	Mar.805B	Feb.750B
Baltic Dry Index:	3354	3006	11700	663
Bullish %:	6184	84	88	2
Insider Corporate Sellers:	52:1	154:1?	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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BLACK SWAN DIVE:

PERFECT STORM?:

Almost every analyst is calling for at least a 10% upmove in stocks for the near future, based on fundamental, historical, and cyclical factors, including lack of alternatives with low rates. Sentiment continues to be at extremes, however, indicating hiccups or even burps in the short term.
To coin a phrase, "It is necessary to clean the house before throwing a party!". Warnings continue from last week, including another magazine cover - Barron's - with a Bear getting impaled by a locomotive. Advance/declines and the McClellan Oscillator suffered with another Friday fear selloff, although new highs abound. Insider Selling was record, although suspect due to several "n/a's" from 3 sectors. Without them it tripled the previous week to 154:1. Money is trickling out of MMFs and starting to trickle into domestic equity mutual funds.
Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	11008	11204	14093	6626
Nasdaq:	2461	2530	2805	1114
S&P 500:	1186	1217	1561	683
CBOE Eq. put/call:	52	51	96-10/08	46-1/03
VIX:	22.0	16.6	90	8.8
McClellan Osc:	-32	20	108	-100
McClellan Sum:	1133	1218	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	54.0	53.3	63	22.21
InvestorsIntel.Bear:	18.0	17.4	54.4	16
AAII Bull:	41.4	38.1	n/a	n/a
AAII Bear:	28.6	34.3	n/a	n/a
Nova/Ursa Mutual Funds:	1.19	1.27	2.2	0.56
US Equity-1 week lag	n/a	2.8B
Money Market Flows	-6B	-35B
ETF equity:Monthly Totals	Mar.805B	Feb.750B
Baltic Dry Index:	3354	3006	11700	663
Bullish %:	84	87	88	2
Insider Corporate Sellers:	154:1?	52:1	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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PERFECT STORM?: