LET'S GET READY TO RALLY!:

If CON is the opposite of PRO, is Congress the opposite of Progress? Set to go on recess August 6, we can expect the markets to excel ( helped by the fact that they usually go on recess during Holidays when people are feeling good about things). Congressional gridlock also seems to help markets, as Congress fails to inhibit them.
Thanks to last week's two day huge rally, the SPX is back in the upward trend channel, with 1420 the current upper band. Changes in the Sentiment Indicators were miniscule, with the AAII Bears increasing  a bit (as did the Bulls!). Mutual Fund equity flows were basically unchanged - the first time since June 1 that they were not negative. Money market flows made a huge reversal from negative $12B to positive $16B.
Here are the numbers:
 

Date>		7/27/2012	7/20/2012
Indices:	DJIA	13075	12822
	NAZ	2958	2925
	SPX	1385	1362
NASD/NYSE	WklyVolume (Bshs).	9.0/4.1	8.4/3.8
nasd/nyse	Specul.Ratio hi=bullish	2.19	2.21
Sentiment:	put/call-CBOE	68	69
Barron's	VIX>50-alltmlow=8.8	16.7	16.3
	Advance/Dec-NYSE..	1893/1269	1679/1470
	Weekly Net:	624	209
	Cumulative:	137843	137219
Weekly	NYSE hi/low	411/190	520/102
New Hi's/Low's	Nasdaq h/l	138/255	242/164
McClellan	Oscillator	16	1
McClellan Sum	.+750/-1000	544	668
Newsletter	Inv.Intel -Bull:tues	40.4	43.6
Surveys	Bear:-5yrs	26.6	24.5
	AAII  -Bull :wed.	28.1	22.2
	Bear	43.1	41.8
COT:Change w/w	large/small (net)k	(2)/(14)	3/(12)
CEOinsider	selling	15:01	17:1
BalticDryIndex	GlobalEcon
3-box rev	Bullish%-	61	61
US equity -ICI	Fund Flows	1 wk lag	0
MMF flows	Change in $B	16.2B	(12.2B)
MargDebt- top (300M)	monthly
ETF:Eqty/Int'l/Bond	million$$ .
2-yr Tsy Yield: Inflation		0.26%	0.21%

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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LET'S GET READY TO RALLY!:

BAD NEWS:

TV News anchors usually start their broadcasts with "Good Evening" and then tell you why it isn't! Negativity abounds all over the globe and the market is reflecting it. Having been in a Bull rally (higher highs and lows) since June 4 - hard to believe- it finally broke the uptrend channel on July 12, then again today, creating what Technicians call Fan Waves.
As seen below we again have a mixed picture: the NYSE to NAZ Volume is getting speculative (toppy), while breadth is surging - my cumulative A/D and New Highs are powerful breadth numbers.
However, Put/call ratios are still high, and the AAII Bulls dropped greatly - to 22 (both Bullish FOR the market).

For those interested, both links below are also updated today:

http://ditmcalls.blogspot.com Note the TSAA monthly meeting this week: http://www.examiner.com/stock-market-in-san-francisco/brent-leonard
Date> 7/20/2012 7/13/2012 Indices: DJIA  12822 12777 NAZ  2925 2908 SPX  1362 1356 NASD/NYSE WklyVolume (Bshs). 8.4/3.8 7.7/3.6 nasd/nyse Specul.Ratio hi=bullish 2.21 2.14 Sentiment: put/call-CBOE  69 72 Barron's VIX>50-alltmlow=8.8 16.3 16.7 Advance/Dec-NYSE.. 1679/1470 1619/1541 Weekly Net: 209 78      Cumulative: 137219 137010 Weekly  NYSE hi/low 520/102 485/93 New Hi's/Low's Nasdaq h/l 242/164 235/140 McClellan  Oscillator 1 21 McClellan Sum .+750/-1000 668 579 Newsletter Inv.Intel -Bull:tues 43.6 44.7 Surveys Bear:-5yrs 24.5 24.5 AAII  -Bull :wed. 22.2 30.2 Bear  41.8 34.7 COT:Change w/w large/small (net)k 3/(12) 0/(11) CEOinsider selling 17:1 32:1 BalticDryIndex GlobalEcon 3-box rev Bullish%-  61 57 US equity -ICI Fund Flows 1 wk lag (1.5B) MMF flows Change in $B (12.2B) 18.6B MargDebt- top (300M) monthly  ETF:Eqty/Int'l/Bond  million$$ . 2-yr Tsy Yield: Inflation 0.21% 0.25%

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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BAD NEWS:

ELECTION RESULTS:

In a recent Bloomberg interview, Canaccord Financial's Tony Dwyer exhibited a chart from Ned Davis Research on market performance in Election years since 1900 ( 28 years meets the typical analysts' sample size of @ 30). The interview can be accessed on Bloomberg's website - search Tony Dwyer . A blow by blow report is also on my Examiner.com column from last week:

http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

According to the model (not available here) the market is expected to rally into October 1 - the strength of the rally dependent on whether the incumbent is expected to be re-elected or not - after that there is a dramatic divergence: if the incumbent is successful, the rally continues into year end with a huge surge; if not, it dramatically sells off into the November 6 election, then enters a trading range.

Despite triskadekaphobia, the market reversed a terrible week, but breadth continued to make new records in my cumulative Advance/Decline stat; Investor Intelligence Bull/Bears ratio widened to even more Bullishness.

On the positive side, the CBOE put/call ratio went back to a high 72; MMFs reversed money flows with an $18B Inflow; and CEO Insider selling remained high (very few buyers). If anyone is skeptical of the importance of the Inv.Intell. and AAII Bull/Bear signal, one can only check the past years extremes:

Most Bulls - 2/10/12

Most Bears - 4/25/12

Least Bears - 9/30/11

Least Bulls 5/30/12

All resulted in proper turning points to some extent.

Here are the numbers:

 

Date>		7/13/2012	7/6/2012
Indices:	DJIA	12777	12772
	NAZ	2908	2937
	SPX	1356	1354
NASD/NYSE	WklyVolume (Bshs).	7.7/3.6	5.7/2.5
nasd/nyse	Specul.Ratio hi=bullish	2.14	2.28
Sentiment:	put/call-CBOE	72	69
Barron's	VIX>50-alltmlow=8.8	16.7	17.1
	Advance/Dec-NYSE..	1619/1541	2030/1126
	Weekly Net:	78	904
	Cumulative:	137010	136932
Weekly	NYSE hi/low	485/93	513/22
New Hi's/Low's	Nasdaq h/l	235/140	297/71
McClellan	Oscillator	21	47
McClellan Sum	.+750/-1000	579	519
Newsletter	Inv.Intel -Bull:tues	44.7	42.5
Surveys	Bear:-5yrs	24.5	24.5
	AAII  -Bull :wed.	30.2	32.6
	Bear	34.7	33.3
COT:Change w/w	large/small (net)k	0/(11)	(2)/(10)
CEOinsider	selling	32:1	34:1
BalticDryIndex	GlobalEcon		discont.
3-box rev	Bullish%-	57	60
US equity -ICI	Fund Flows	1 wk lag	($3.1)
MMF flows	Change in $B	18.6B	3.3B
MargDebt- top (300M)	monthly		May
ETF:Eqty/Int'l/Bond	million$$ .		May
2-yr Tsy Yield: Inflation		0.25%	0.28%

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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ELECTION RESULTS:

triskaidekaphobia?:

For those fearful of Friday the 13th, this could be another scary week for the markets.The ECRI (Economic Cycle Research Inst.) has a perfect record of calling Recessions, and says one is on the way here in the U.S. Another very tight correlation mentioned in Barron's is the Citi Economic Surprise Index vs. a stock-less-Treasury rate index, although the correlation to the stock market is non-existent.
Being dropped from the Sentiment Indicator grid is the BDI (Baltic Dry Index) of global shipping - 100% of the largest shipping owners pooh-poohed it as a reliable indicator. The number of AAII Bears has dropped greatly as the Bulls increased; insider selling more than doubled (college funding?), as did the McClellan Summation Index; the Oscillator hovers around +50 - my sell signal.
What remains impressive is the market breadth - if not the DJIA nor SPX - my cumulative Advance/Decline of NYSE stocks continues to make new highs, and number of stocks at new lows are almost nonexistent.
July-August has an 80% chance of rising in election years - but then there is that 20%!!!!
 More blah,blah,blah can be found at:

http://ditmcalls.blogspot.com

http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

 

Date>		7/6/2012	6/29/2012
Indices:	DJIA	12772	12880
	NAZ	2937	2935
	SPX	1354	1362
NASD/NYSE	WklyVolume (Bshs).	5.7/2.5	8.3/4.1
nasd/nyse	Specul.Ratio hi=bullish	2.28	2.02
Sentiment:	put/call-CBOE	69	72
Barron's	VIX>50-alltmlow=8.8	17.1	17.1
	Advance/Dec-NYSE..	2030/1126	2431/742
	Weekly Net:	904	1689
	Cumulative:	136932	136028
Weekly	NYSE hi/low	513/22	346/147
New Hi's/Low's	Nasdaq h/l	297/71	220/172
McClellan	Oscillator	47	76
McClellan Sum	.+750/-1000	519	208
Newsletter	Inv.Intel -Bull:tues	42.5	38.7
Surveys	Bear:-5yrs	24.5	24.7
	AAII  -Bull :wed.	32.6	28.7
	Bear	33.3	44.4
COT:Change w/w	large/small (net)k	(2)/(10)	(2)/(10)
CEOinsider	selling	34:1	13:1
BalticDryIndex	GlobalEcon	discont.	924
3-box rev	Bullish%-	60	56
US equity -ICI	Fund Flows	1 wk lag	(1.5B)
MMF flows	Change in $B	3.3B	3.4B
MargDebt- top (300M)	monthly	May	279B
ETF:Eqty/Int'l/Bond	million$$ .	May	650/248/216
2-yr Tsy Yield: Inflation		0.28%	0.31%

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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triskaidekaphobia?:

THANK YOU FRIDAY!!:

With a nearly 300 point upswing to the EOM, EOQ2, EOH1 (1st half) of 2012, the market salvaged a decent year-to-date with portfolio dressing on the final day. According to Sam Stovall, the markets rise in the second half of the year 80% of the time, especially in an election year - 70% in the 4th Q. Also, if the SPX is higher on Oct.31 than on July 1, the incumbent President gets re-elected.
U. of Michigan Consumer Sentiment survey sank to 73 last week - a multi-month low.

This week's report shows a wild swing in MMF flows from a huge decrease the prior week to a small inflow last week. Near the bottom of the grid below is shown ETF totals (in Millions$) - stocks, Int'l stocks and bonds. These have been almost unchanged lately after the huge bond surge. Margin debt over $300B usually causes a downdraft in the markets.

Here are the numbers:

Date>		6/29/2012	6/22/2012
Indices:	DJIA	12880	12640
	NAZ	2935	2892
	SPX	1362	1335
NASD/NYSE	WklyVolume (Bshs).	8.3/4.1	n/a
nasd/nyse	Specul.Ratio hi=bullish	2.02	****
Sentiment:	put/call-CBOE	72	64
Barron's	VIX>50-alltmlow=8.8	17.1	18.1
	Advance/Dec-NYSE..	2431/742	1813/1363
	Weekly Net:	1689	450
	Cumulative:	136028	134339
Weekly	NYSE hi/low	346/147	260/86
New Hi's/Low's	Nasdaq h/l	220/172	213/132
McClellan	Oscillator	76	45
McClellan Sum	.+750/-1000	208	0
Newsletter	Inv.Intel -Bull:tues	38.7	37.2
Surveys	Bear:-5yrs	24.7	25.6
	AAII  -Bull :wed.	28.7	32.9
	Bear	44.4	35.9
COT:Change w/w	large/small (net)k	(2)/(10)	(1)/(6)
CEOinsider	selling	13:1	22:1
BalticDryIndex	GlobalEcon	924	924
3-box rev	Bullish%-	56	55
US equity -ICI	Fund Flows	1 wk lag	(1.8B)
MMF flows	Change in $B	3.4B	(20.9B)
MargDebt- top (300M)	monthly	279B	MAY
ETF:Eqty/Int'l/Bond	million$$ .	650/248/216	MAY
2-yr Tsy Yield: Inflation		0.31%	0.32%

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

THANK YOU FRIDAY!!: