VALIDATION -(SORT OF):

As the reader might be aware of, for the past 2 years I have been almost fully invested and testing a defensive investment strategy I call DITM (deep-in-the-money) covered call, offering double-digit annualized returns, almost no losing positions, and a lot less frustration than the HFT-driven stock market.

Last week I received my monthly Schwab Research letter in which their top guru - Randy Frederick espoused my exact strategy, almost word for word: A or B rated stocks, 3% dividend sold in a Buy/Write about a week before ex-Dividend date, 5-6 months out to "capture" both the option premium and dividend (s).

That said, the current market environment is ideal for that strategy: stock prices are getting cheaper, making the dividend % higher, and call volatility (price) that is sold in a buy/write also higher.

I have a sister blog: http://ditmcalls.blogspot.com, with an extensive track record of actual trades ("older posts), and current trades.

And now to Sentiment: Very little has changed in the Indicators, although slight increases occurred in the McClellan Oscillator (down to -29); margin debt is exceptionally high, at $321B (the high of $381B was in July of '07). Insider selling doubled to 44:1 over buying.

Nothing seems to indicate falling off a cliff - 2-year Tsy yield, VIX, inverted AAII Bull/Bear ratio.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	12151	12441	14093	6626
Nasdaq:	2732	2796	2861	1114
S&P 500:	1300	1331	1561	683
CBOE Eq. put/call:	69	58	96-10/08	46-1/03
VIX:	18.0	16.0	90	8.8
McClellan Osc:	(29)	16	108	(123)
McClellan Sum:	458	458	1568	(1514)
Newsletter Surveys
InvestorsIntel.Bull:	n/a	n/a	63	22.21
InvestorsIntel.Bear:	n/a	n/a	54.4	16
AAII Bull:	30.2	25.6	n/a	n/a
AAII Bear:	33.4	41.4	n/a	n/a
US Equity-1 week lag	n/a	(2.4B)
Money Market Flows	(21.9B)	24B
Baltic Dry Index:	1489	1467	11700	663
Bullish %:	72	74	89	2
Insider Corporate Sellers:	44:1	23:1	235:1	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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VALIDATION -(SORT OF):