Actually, both are! Depending on the timing. As local analyst Harry Domash recently stated at a Money Show talk: The Trend is your Friend until it Bends at the End! In other words, it is at extremes that surprises occur. The current Bull stock market, although not record-setting in lack of corrections or Bear markets, is quite long in the tooth. Per a recent Barron's headline - the SPX has gone 1350 days without even a 10% correction. Prior longer records were 2004-07 and 1990-97 - and we know how that ended up!
Still, there is little evidence that the end is nigh - record margin interest - much higher than the above two periods- could result in a cascading drop, similar to the 1987 "Portfolio Insurance" calamity, where selling begat more selling. Most other Sentiment Indicators are still quite average; and the AAII (Individual Investor) Bulls have dropped below 30% for almost two months- recently 20% and 25%. No complacency here, especially with all the global troubles pending. The Retail investor has been conspicuously absent during this rally from March 2009, with the exception of Index ETFs.
The Nasdaq continues to make new highs, although the Volume dropped last week in relation to the NYSE - the Naz being the more speculative vehicle - possibly due to Triple Witching of expiring options. The NYSE Volume Friday was more than the previous two days combined!!! The McClellan Summation Index - cumulative reading of the Oscillators - continued to be negative - a rara avis, and a Bullish sign historically. Finally, money is flowing out of both MMFunds and Equity mutual funds - where is it going? We should know more next week when the monthly numbers from ICI come out (see below):
| Date> | 6/19/2015 | 6/12/2015 | |
| Indices: | DJIA | 18015 | 17898 |
| NAZ | 5117 | 5051 | |
| SPX | 2109 | 2094 | |
| WklyVolume (Bshs). | naz/ny…. | 9.2/4.8 | 8.2/3.6 |
| Specul.Ratio hi=bullish | 1.92 | 2.28 | |
| Sentiment: | put/call-CBOE | 62 | 58 |
| VIX>50-alltmlow=8.8 | 14 | 13.8 | |
| Advance/Dec-NYSE.. | 1766/1477 | 1442/1801 | |
| Weekly Net: | 289 | -359 | |
| Cumulative: | 166146 | 165857 | |
| Weekly | NYSE hi/low… | 237/241 | 212/292 |
| New Hi's/Low's | Nasdaq h/l | 380/146 | 307/120 |
| McClellan | Oscillator | 0 | -25 |
| McClellanSum | .+750/-1000 | -199 | -150 |
| Newsletter | Inv.Intel -Bull | 45.5 | 47.4 |
| Surveys-Tues | Bear:-5yrs | 16.5 | 16.5 |
| Wed. | AAII -Bull | 25.4 | 20.0 |
| Bear | 34.3 | 32.6 | |
| COT:SPX w/w | large/small (net)k | 7k/(51k) | 6k/(28k) |
| COT:gold comm.hedg | long-short.000 | (76k) | (79k) |
| COT:OIL comm.hedg | long-short. | (330k) | (325k) |
| US$-WSJ | 85.6 | 86.3 | |
| CEOinsider | selling | 24:1 | 18:1 |
| off.&bd b/s.vs. | 10% holder b/s | 160/35 | 160/50 |
| 3-box rev | Bullish%- | 62 | 61 |
| US equity -ICI | Fund Flows | WeekDelay | (3.9B) |
| MMF flows | Change in $B | (11.1B) | (7.7B) |
| MargDebt- top (300M) | monthly | 507B | APR.: |
| ETF:mthlyEqty/ | Int'l/Bond-$B | 1256/519/318 | APR.: |
| 2-yr Tsy Yield: Inflation | 0.73% | ||
| TIP (ETF) | Inflation | 112.61 | 111.67 |
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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