STOCKS VS. BONDS:

In the forthcoming TSAA Review there is an article by GGU Adjunct Prof. Nolan Olhausen which reopened my eyes to a tight inverse correlation between stocks and bonds, primarily Treasuries. Since 2007 there has been a mirror image of these, as shown by comparing the TLT to the SPY on a daily basis - almost as though it were a zero sum game.

Another tight correlation, also coincident, is one I've espied for years in the IBD (Investors' Daily), on the chart page, between the DJIA and put/call trading Volume below it - also inverse.

Although coincident may be too late to act, being in the neighborhood can be an eventual and cautionary alert.

Last week's drowsy mean-seeking numbers gave little indications, save for the AAII Bull/Bear readings - a very reliable one: they jumped from 30/42 to 20/49, which is cause for an imminent rally, possibly after Labor Day - a usually bullish time, before the Sept./Oct. onslaught.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10150	10213	14093	6626
Nasdaq:	2153	2179	2805	1114
S&P 500:	1064	1071	1561	683
CBOE Eq. put/call:	70	66	96-10/08	46-1/03
VIX:	24.4	25.5	90	8.8
McClellan Osc:	-15	-34	108	-123
McClellan Sum:	371	607	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	33.3	36.7	63	22.21
InvestorsIntel.Bear:	31.2	31.1	54.4	16
AAII Bull:	20.7	30.1	n/a	n/a
AAII Bear:	49.5	42.5	n/a	n/a
Nova/Ursa Mutual Funds:	n/a	n/a	2.2	0.56
US Equity-1 week lag	n/a	(2.7B)
Money Market Flows	3.7B	4.1B
ETF equity:Monthly Totals	Apr.831B	Mar.805B	n/a
Baltic Dry Index:	2703	2756	11700	663
Bullish %:	44	54	88	2
Insider Corporate Sellers:	18:1	14:1	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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STOCKS VS. BONDS:

AUGHT FOR NAUGHT:

Not only is the 4-year President's or Kinchin cycle predicting a Fall crash, but the zero year in the Decennial cycle, for 11 cycles (1890) is the worst of the 10. That said, as more and more talking heads and scribes mention this fact, as a contrarian I hold out hope that Sept./Oct., as last year, might not be that bad. I continue to be fully invested in my DITM (covered call with a safety net) strategy, until proven otherwise, despite a gloomy economic picture.

According to Hirsch's Trader's Almanac, over a recent 57-year study, $10,000 became over $578,000 from Nov. to May, while its complementary 6-month period lost money to $341!; however, in that study of Election years, 14 of 21 times the market gained from Oct. to Dec., especially when incumbents were ousted.

The summer Dog Days kept Volume low and most indicators mid-range; however the AAII Bears (one of the most reliable contrary indicators) jumped from 30% to over 42. The Baltic Dry Index - BDI- is screaming to the upside, a sign of healthier global economies.

See below:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10213	10303	14093	6626
Nasdaq:	2179	2176	2805	1114
S&P 500:	1071	1079	1561	683
CBOE Eq. put/call:	66	58	96-10/08	46-1/03
VIX:	25.5	26.2	90	8.8
McClellan Osc:	-34	-40	108	-123
McClellan Sum:	607	684	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	36.7	41.7	63	22.21
InvestorsIntel.Bear:	31.1	27.5	54.4	16
AAII Bull:	30.1	39.8	n/a	n/a
AAII Bear:	42.5	30.1	n/a	n/a
Nova/Ursa Mutual Funds:	n/a	n/a	2.2	0.56
US Equity-1 week lag	n/a	(2.0B)
Money Market Flows	4.1B	3.5B
ETF equity:Monthly Totals	Apr.831B	Mar.805B
Baltic Dry Index:	2756	2468	11700	663
Bullish %:	54	55	88	2
Insider Corporate Sellers:	14:1	18:1	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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AUGHT FOR NAUGHT:

August 16

With light Volume in these Dog Days, today's slight upturn reflects a higher reading of the CBOE Equity put/call ratio at 66, a low McClellan Oscillator reading of -40 (oversold), and a nice rebound in the global economic proxy - the BDI, or Baltic Dry Index of 2468, up 500 points from last week.
Everyone except the Chinese are buying US treasuries, putting the 2-yr at .50% and the 10-year at 2.5%, locking in those yields for an "extended" period.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10303	10653	14093	6626
Nasdaq:	2176	2288	2805	1114
S&P 500:	1079	1121	1561	683
CBOE Eq. put/call:	66	58	96-10/08	46-1/03
VIX:	26.2	21.7	90	8.8
McClellan Osc:	-40	25	108	-123
McClellan Sum:	684	750	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	41.7	38.9	63	22.21
InvestorsIntel.Bear:	27.5	33.3	54.4	16
AAII Bull:	39.8	30.4	n/a	n/a
AAII Bear:	30.1	38.2	n/a	n/a
Nova/Ursa Mutual Funds:	n/a	n/a	2.2	0.56
US Equity-1 week lag	n/a	-2.8B
Money Market Flows	-3.5B	19.2B
ETF equity:Monthly Totals	Apr.831B	Mar.805B
Baltic Dry Index:	2468	1978	11700	663
Bullish %:	55	59	88	2
Insider Corporate Sellers:	18:1	25:1	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

Subscribe in a reader

August 16