SANTA CLAUS RALLY:

This week is traditionally the week for the Santa Claus rally and the Mother of all rallies (in his 40 years) that Tom Demark predicted (offset a couple weeks). Also notable are the technically high probability events ( recently negated by Fed intervention, etc.) are the January Effect of small cap stocks and CEF (closed-end funds), such as munis, that get sold off in December, only to rally in January - something that is observable if not actionable.
Indicators are mean reverted, except for the McClellan Oscillator near its high border of 50, and bull/bear newsletters approaching complacency - so we could have a hiccup on the way higher. With markets barely even from a year ago, and even a decade ago, you might want to check out my other blog: http://ditmcalls.blogspot.com for safer yet much more rewarding strategy, or just an alternative to zero interest rates in CDs, MMFs, etc.
Here are the Indicators for last week:

Date>		12/23/2011	12/16/2011
Indices:	DJIA	12294	11866
	NAZ	2618	2555
	SPX	1265	1219
NASD/NYSE	WklyVolume (Bshs)	3.8/7.7	5.3/9.3
nasd/nyse	Specul.Ratio hi=bullish	2.03	1.75
Sentiment:	put/call-CBOE	63	80
Barron's	VIX>50-alltmlow=8.8	20.7	24.29
	Advance/Dec-NYSE	2577/587	813/2348
	Weekly Net:	1990	-1535
	Cumulative:	125945	123955
Weekly	NYSE hi/low	293/146	190/168
New Hi's/Low's	Nasdaq h/l	111/257	87/292
McClellan	Oscillator	48	-17
McClellan Sum	.+750/-1000	134	81
Newsletter	Inv.Intel -Bull:tues	48.4	45.3
Surveys	Bear:-5yrs	30.5	30.5
	AAII  -Bull :wed.	33.7	40.2
	Bear	28.2	33.6
COT:Change w/w	large/small (net)k	0/12.	17/19.
CEOinsider	selling	10:1	19:1
BalticDryIndex	GlobalEcon	1888	1889
3-box rev	Bullish%-	61	58
US equity -ICI	Fund Flows	1 wk lag	(4.0B)
MMF flows	Change in $B	14.2B	.3B
MargDebt- top (300M)	monthly OCT.		283B
ETF:Eqty/Int'l/Bond	million$$ OCT.		615/265/174
2-yr Tsy Yield: Inflation		0.29%	0.23%
Euro futures	1 yr.offset	5.06M	5.78M

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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SANTA CLAUS RALLY:

"OFF" DEMARK:

Over the years I've heard Technical Analyst Tom Demark at TSAA meetings, Bloomberg talks (he was on their staff with his Indicator), even had dinner with him - but never quite bought into his math predictions. Two weeks ago , highly touted by Bloomberg's Adam Johnson, as being followed by Soros, SAC's Cohen, et.al., when his bullish prediction lined up with my observations, I forecasted a seasonal rally.
Tom's prediction: 1330-45 on the SPX by the 21st of Dec. did seem pretty outlandish, and now - two days away, with the SPX at 1212, it would take a Xmas miracle to get there, although a yearend rally is likely (The Santa Claus rally is actually between Xmas and New Year's).
Other than the CBOE put/call ratio at 80, no other Indicator is at an extreme, this past low-volume week:

Date>		12/16/2011	12/9/2011
Indices:	DJIA	11866	12184
	NAZ	2555	2646
	SPX	1219	1255
NASD/NYSE	WklyVolume (Bshs)	5.3/9.3	4.4/8.3
nasd/nyse	Specul.Ratio hi=bullish	1.75	1.89
Sentiment:	put/call-CBOE	80	77
Barron's	VIX>50-alltmlow=8.8	24.29	26.38
	Advance/Dec-NYSE	813/2348	1876/1269
	Weekly Net:	-1535	607
	Cumulative:	123955	125490
Weekly	NYSE hi/low	190/168	239/44
New Hi's/Low's	Nasdaq h/l	87/292	110/147
McClellan	Oscillator	-17	16
McClellan Sum	.+750/-1000	81	237
Newsletter	Inv.Intel -Bull:tues	45.3	47.4
Surveys	Bear:-5yrs	30.5	29.5
	AAII  -Bull :wed.	40.2	38.6
	Bear	33.6	34.8
COT:Change w/w	large/small (net)k	17/19.	11/34.
CEOinsider	selling	19:1	40:1
BalticDryIndex	GlobalEcon	1889	1882
3-box rev	Bullish%-	58	61
US equity -ICI	Fund Flows	1 wk lag	1 wk lag
MMF flows	Change in $B	.3B	25.3B
MargDebt- top (300M)	monthly OCT.	283B
ETF:Eqty/Int'l/Bond	million$$ OCT.	615/265/174
2-yr Tsy Yield: Inflation		0.23%	0.23%
Euro futures	1 yr.offset	5.78M
	CommHedg

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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"OFF" DEMARK:

OVERFISHING:

Days like today (down 240 points on the DJIA) only further the idea that the sharks (HFTs, Institutional Traders, et.al) are driving the small fish out of the water -only to fight among themselves. In the matrix below we see that equity mutual fund outflows have steadily occurred since April 22 without exception, and money market inflows are again happening -after the scare about dangerous European securities being invested in.

The new format below, not as eye-appealing, but with more data, now shows NASD to NYSE Volume and ratio (NASD being speculative); also shown is the weekly Adv./Dec. on the NYSE with my cumulative totals.The only real negatives this week were the AAII bull/bear reverted to more Bulls, and CEO Insider Selling leaped to 40:1. Finally, the ETF equity funds increased 20% month over month, to $615M.

Date>		12/2/2011	12/9/2011
Indices:	DJIA	12019	12184
	NAZ	2626	2646
	SPX	1244	1255
NASD/NYSE	WklyVolume (Bshs)	5.3/9.1	4.4/8.3
nasd/nyse	Specul.Ratio hi=bullish	1.72	1.89
Sentiment:	put/call-CBOE	61	77
Barron's	VIX>50-alltmlow=8.8	27.5	26.38
	Advance/Dec-NYSE	2698/479	1876/1269
	Weekly Net:	2219	607
	Cumulative:	124883	125490
Weekly	NYSE hi/low	258/120	239/44
New Hi's/Low's	Nasdaq h/l	95/229	110/147
McClellan	Oscillator	-2	16
McClellan Sum	.+750/-1000	176	237
Newsletter	Inv.Intel -Bull:tues	44.2	47.4
Surveys	Bear:-5yrs	30.5	29.5
	AAII  -Bull :wed.	33	38.6
	Bear	39.4	34.8
COT:Change w/w	large/small (net)k	…4/12	11/34.
CEOinsider	selling	11:1	40:1
BalticDryIndex	GlobalEcon	1862	1882
3-box rev	Bullish%-	58	61
US equity -ICI	Fund Flows	(6.7B)	1 wk lag
MMF flows	Change in $B	6.1B	25.3B
MargDebt-mkt down 22% 1 year after top (300M)	monthly OCT.	283B
ETF:Eqty/Int'l/Bond	million$$ OCT.	615/265/174
2-yr Tsy Yield: Inflation		0.26%	0.23%

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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OVERFISHING:

RALLYTIME?:

Last week's pre-Xmas gift in the markets sent most Indicators into the median area; however, the AAII bull/bear ratio (one of the better Indicators) is still inverted for a seasonal upswing.
Monthly ETF flows show a big swing into Equities -
Here are the numbers:

Date>			11/25/2011	12/2/2011
Indices:	DJIA		11231	12019
	NAZ		2441	2626
	SPX		1158	1244
NASD/NYSE	WklyVolume (Bshs)		3.1/6.3	5.3/9.1
nasd/nyse	Specul.Ratio hi=bullish		2.03	1.72
Sentiment:	put/call-CBOE		69	61
Barron's	VIX>50-alltmlow=8.8		34.47	27.5
	Advance/Dec-NYSE		na	2698/479
	Weekly Net:		"	2219
	Cumulative:		"	124883
Weekly	NYSE hi/low		"	258/120
New Hi's/Low's	Nasdaq h/l		"	95/229
McClellan	Oscillator		-98	-2
McClellan Sum	.+750/-1000		296	176
Newsletter	Inv.Intel -Bull:tues		47.4	44.2
Surveys	Bear:-5yrs		32.6	30.5
	AAII  -Bull :wed.		32.7	33
	Bear		38.3	39.4
COT:Change w/w	large/small (net)k		na	…4/12
CEOinsider	selling		7:1	11:1
BalticDryIndex	GlobalEcon		1854	1862
3-box rev	Bullish%-		50	58
US equity -ICI	Fund Flows		(.1B)	1 wk lag
MMF flows	Change in $B		1B	6.1B
MargDebt-mkt down 22% 1 year after top (300M)	monthly	Sept:		283B
ETF:Eqty/Int'l/Bond	million$$	Sept:		615/265/174
2-yr Tsy Yield: Inflation			0.28%	0.26%

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

RALLYTIME?: