JANUS - The Two-faced GOD

The definition of NT Taleb's Black Swan is a material event causing a shock that should have been foreseen. Gross's departure was probably imminent but is sending shock waves throughout the bond and ETF markets.

  Sentiment: Standouts from last week in the Sentiment area include halitosis (bad breadth) in both NYSE and Nasdaq, as well as new highs and lows, despite the great Friday rally!  Insider selling by sector was huge, but so was the buying, so that the S/B ratio came down to 25:1 from 61 the previous week.

The McClellan Oscillator, a fairly fast-twitch indicator, closed at minus 43, a BUY signal for Monday. Again, in spite of Friday's big UP day, the VIX closed up nearly 3 points w/w.  The S&P500 COT (Traders') large guys reversed from 11k to only 1k, while the small guys (dumb money?) reversed to Bullish from minus 22k to plus 35k! The two-year Treas. hit a new recent high in yield to 0.58%.

*note:  I shall be on vacay next week, away from electronic thingees.

Here are the numbers:

Date>		9/26/2014	9/19/2014
Indices:	DJIA	17113	17279
	NAZ	4512	4579
	SPX	1982	2010
WklyVolume (Bshs).	naz/ny	9.0/3.5	10.1/4.4
Specul.Ratio hi=bullish		2.57	2.3
Sentiment:	put/call-CBOE	69	60
VIX>50-alltmlow=8.8		14.9	12.1
Advance/Dec-NYSE..		646/2592	1604/1622
Weekly Net:		-1946	-18
Cumulative:		161903	163849
Weekly	NYSE hi/low	88/315	209/187
New Hi's/Low's	Nasdaq h/l	95/322	174/232
McClellan	Oscillator	-43	-28
McClellanSum	.+750/-1000	-55	248
Newsletter	Inv.Intel -Bull:tues	48	52.5
Surveys	Bear:-5yrs	15.3	15.2
	AAII  -Bull :wed.	41.8	42.2
	Bear	28.2	23
COT:SPX w/w	large/small (net)k	(1k)/35k	11k/(22k)
COT:gold  comm.hedg	long-short.000	(64k)	(77k)
CEOinsider	selling	25:1	61:1
off.&bd b/s.vs.	10% holder b/s	175/35	175/30
3-box rev	Bullish%-	70	74
US equity -ICI	Fund Flows	WeekDelay	(2.0B)
MMF flows	Change in $B	15B	(16.7B)
MargDebt- top (300M)	monthly	463B	460B
ETF:mthlyEqty/	Int'l/Bond-$B	n/a	1100/443/272
2-yr Tsy Yield: Inflation		0.58%nh	0.57%

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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JANUS - The Two-faced GOD

Monday, Monday

Today marks the Autumnal Equinox, and the market is reacting to it, so far. At least it's as good an excuse as the other media offerings. Breadth, as measured by the NYSE Advance/Decline line, was negative (barely) for the third week. Despite all the headlines about DJIA and S&P500 up to new highs, the underlying picture is not that great - especially for small caps.

Per Barron's Trader: Since March 2009 stocks have made new highs, the fourth longest and biggest rise in history; yet now the average stock in the SPX is DOWN 7% from its 52-week high. For one thing, only about 250 of the 500 stocks from 2008 still exist in the Index; the Wilshire 5000 went to @6500 awhile back, but is now only @2500 stocks - Survivorship bias. Also, The SPX is Cap weighted, meaning the biggest stocks (Google, Apple, ) dominate.

More of this at:   http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Although most Sentiment Indicators have regressed to the mean lately, a couple are notable: In the Commitment of Traders (COT) large traders have jumped to the Buy side, while small ones reversed to selling (see below); although Gold looks terrible weak vis-a-vis the strong Dollar, commercial traders have lightened upon their selling. Finally, insider selling, at least by sector, rose the past two weeks, while MMF flows reversed from Up $6B to Down $16B.

Here are the numbers:

Date>		9/19/2014	9/12/2014
Indices:	DJIA	17279	16987
	NAZ	4579	4567
	SPX	2010	1985
WklyVolume (Bshs).	naz/ny	10.1/4.4	8.8/3.1
Specul.Ratio hi=bullish		2.3	2.84
Sentiment:	put/call-CBOE	60	60
VIX>50-alltmlow=8.8		12.1	13.3
Advance/Dec-NYSE..		1604/1622	718/2528
Weekly Net:		-18	-1810
Cumulative:		163849	163867
Weekly	NYSE hi/low	209/187	219/123
New Hi's/Low's	Nasdaq h/l	174/232	195/148
McClellan	Oscillator	-28	-51
McClellanSum	.+750/-1000	248	433
Newsletter	Inv.Intel -Bull:tues	52.5	57.6
Surveys	Bear:-5yrs	15.2	14.1
	AAII  -Bull :wed.	42.2	40.4
	Bear	23	26.6
COT:SPX w/w	large/small (net)k	11k/(22k)	0/(7k)
COT:gold  comm.hedg	long-short.000	(77k)	(98k)
CEOinsider	selling	61:1	48:1
off.&bd b/s.vs.	10% holder b/s	175/30	200/40
3-box rev	Bullish%-	74	75
US equity -ICI	Fund Flows	WeekDelay	(1.3B)
MMF flows	Change in $B	(16.7B)	6.5B
MargDebt- top (300M)	monthly	460B
ETF:mthlyEqty/	Int'l/Bond-$B	1100/443/272
2-yr Tsy Yield: Inflation		0.57%	0.56%

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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Monday, Monday

DIVIDED KINGDOM

So far this week the markets are slightly positive, as consistently predicted (short term) by the McClellan Oscillator, which ended last week at minus 51. Much happening this week as the Fed tries to parse words about rates, BABA IPO comes out, and Scotland decides whether it wants a divided or united kingdom- DK or UK? (one floor trader I worked with used to use DK as short for Don't Know!)

For what it's worth, the 2-year Treas. yield jumped to a recent high last week at .56%, bringing up the question of Interest Rates versus Inflation. Stocks seem to do well with rising interest rates, especially if due to an improving economy- however, as Jim Paulsen posits, over the past 30 years 6 of the last 7 Inflation hikes have resulted in either corrections or Bear markets - the 7th waiting until 2008! Stock market rises have come during Disinflation.

Finally, despite the NYSE's Advance/decline "bad breadth", Inv. Intlell. Bears (from wire house newsletters) remain at complacent lows. Here are the numbers:

Date>		9/12/2014	9/5/2014
Indices:	DJIA	16987	17137
	NAZ	4567	4582
	SPX	1985	2007
WklyVolume (Bshs).	naz/ny	8.8/3.1	7.0/2.4
Specul.Ratio hi=bullish		2.84	2.9
Sentiment:	put/call-CBOE	60	64
VIX>50-alltmlow=8.8		13.3	12.1
Advance/Dec-NYSE..		718/2528	1371/1837
Weekly Net:		-1810	-466
Cumulative:		163867	165677
Weekly	NYSE hi/low	219/123	402/52
New Hi's/Low's	Nasdaq h/l	195/148	250/108
McClellan	Oscillator	-51	6
McClellanSum	.+750/-1000	433	586
Newsletter	Inv.Intel -Bull:tues	57.6	56.1
Surveys	Bear:-5yrs	14.1	13.3
	AAII  -Bull :wed.	40.4	44.7
	Bear	26.6	24
COT:SPX w/w	large/small (net)k	0/(7k)	3/(9)
COT:gold  comm.hedg	long-short.000	(98k)	(104k)
CEOinsider	selling	48:1	27:1
off.&bd b/s.vs.	10% holder b/s	200/40	175/35
3-box rev	Bullish%-	75	76
US equity -ICI	Fund Flows	WeekDelay	(5.3B)
MMF flows	Change in $B	6.5B	(8.7B)
MargDebt- top (300M)	monthly		JULY
ETF:mthlyEqty/	Int'l/Bond-$B		JULY
2-yr Tsy Yield: Inflation		0.56%	0.51%

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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DIVIDED KINGDOM

UPSIDE DOWN

Thanks to the Fed Head's foot on the gas pedal, market cycles seem to be reversing, or at least unpredictably inconsistent. August, a usually bad month, from 2011 to 2013 was down, up, then down; Sept., the worst of the 12 months, was down in '11 but up the last two years.  October - the month to fear, going back to 1929, was up big in 2011, down some in '12, then straight up hugely in 2013! Finally, November, was down two years until 2013. So far this year - August was up huge 90 points, of nearly 5%.

The Investors' Intelligence Bearish %, at 13.3% last week, is the lowest since 1987. Commercial gold sellers remain high, thanks to Super Mario's QE raising the $$ by lowering the Euro strength.

Here are the numbers from the Holiday week:

Date>		9/5/2014	8/29/2014
Indices:	DJIA	17137	17098
	NAZ	4582	4580
	SPX	2007	2003
WklyVolume (Bshs).	naz/ny	7.0/2.4	6.8/2.6
Specul.Ratio hi=bullish		2.9	2.6
Sentiment:	put/call-CBOE	64	59
VIX>50-alltmlow=8.8		12.1	12
Advance/Dec-NYSE..		1371/1837	2168/1058
Weekly Net:		-466	1110
Cumulative:		165677	166143
Weekly	NYSE hi/low	402/52	428/42
New Hi's/Low's	Nasdaq h/l	250/108	230/98
McClellan	Oscillator	6	N/A
McClellanSum	.+750/-1000	586	N/A
Newsletter	Inv.Intel -Bull:tues	56.1	52.5
Surveys	Bear:-5yrs	13.3	15.1
	AAII  -Bull :wed.	44.7	51.9
	Bear	24	19.2
COT:SPX w/w	large/small (net)k	3/(9)	N/A
COT:gold  comm.hedg	long-short.000	(104k)	N/A
CEOinsider	selling	27:1	N/A
off.&bd b/s.vs.	10% holder b/s	175/35	N/A
3-box rev	Bullish%-	76	75
US equity -ICI	Fund Flows	WeekDelay	(2.2B)
MMF flows	Change in $B	(8.7B)	11B
MargDebt- top (300M)	monthly
ETF:mthlyEqty/	Int'l/Bond-$B
2-yr Tsy Yield: Inflation		0.51%	N/A

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

UPSIDE DOWN