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: