Contrarian's Delight - Media hype is that September (and October) are the worst times for stocks. So far...so good. On the worst Volume and smallest indices moves in awhile - Sentiment Indicators were jumping all around last week, as we approached the top of the 1025-1125 S&P500 Trading Range.
Thanks to Labor Day and Rosh Hashana, trading was weak, but mostly positive.
My cumulative A/D went to another new high, as did NYSE new highs - much of which are bond-like securities (Pfds, CEFs, ETFs); but the Nasdaq new hi's/lo's inverted positive.
Newsletter surveys went Bearish FOR the market, especially the AAII ratio.
And CEO Insider Selling quadrupled to 21:1, but exchanges Short Interest shot up @5%.
The BDI, or Baltic Dry Index, a proxy for the global economy, hit a 3-month high, as did the WIP, the World Inflation Index.
Finally, large numbers of $$ flowed out of domestic equity mutual funds and into MMFs.
After next week I shall be vacationing with family in SoCal, so the blog will be temporarily interrupted.
When returning, I have been invited to speak to the Silicon Valley Option Group on Oct.13, at the San Jose Embassy Suites, and also a Marin investor group.
Topic will be my DITM, or Deep-In-The-Money option strategy which has performed very well in this economy - I shall also be starting a new blog citing the actual trading results since its inception in 2009: very close to the historic 100-year stock market average of 10%, when markets are now still at 1998 levels!
Here are a couple of recent results with opening date, Symbol and Total Net Return :
7/14/2010 PFE 19.07%
10/29/09 DD 8.70%
2/26/10 MRK 11.4%
And here are the Sentiment Indicators:
|
| MktSentiment | Last Week
| Prev. Week | 5 Yr HI | 5 Yr LOW |
| DJIA: | 10462
| 10447
| 14093
| 6626
|
Nasdaq:
| 2242
| 2133
| 2805
| 1114
|
S&P 500:
| 1109
| 1104
| 1561
| 683
|
| CBOE Eq. put/call: | 61
| 58
| 96-10/08
| 46-1/03
|
VIX:
| 22.0
| 21.3
| 90
| 8.8
|
| McClellan Osc: | 43
| 48
| 108
| (123)
|
McClellan Sum:
| 502
| 376
| 1568
| (1514)
|
Newsletter Surveys
|
|
|
|
|
InvestorsIntel.Bull:
| 33.3
| 29.4
| 63
| 22.21
|
InvestorsIntel.Bear:
| 32.2
| 37.7
| 54.4
| 16
|
AAII Bull:
| 43.9
| 30.8
| n/a | n/a |
AAII Bear:
| 31.6
| 42.2
| n/a
| n/a |
Nova/Ursa Mutual Funds:
| n/a
| n/a
| 2.2
| 0.56
|
US Equity-1 week lag
| n/a
| (7.6B)
|
|
|
Money Market Flows
| 10.6B
| (6.2B)
|
|
|
ETF equity:Monthly Totals
| n/a
| n/a
| n/a
|
|
| Baltic Dry Index: | 2995
| 2835
| 11700
| 663
|
Bullish %:
| 52
| 49
| 88
| 2
|
Insider Corporate Sellers:
| 21:1
| 5:1
| 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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Thank Goodness It's Fall!:
