T.S. Elliot said April was the cruelest month (even before Income Tax); but for stocks the
cruelest months are August through October. Going back to the 1929 Crash, Oct.
was #1, August (upcoming soon) was #2, per Barron's this week.
Short term traers may want to exit for a vaca; longer term
may want to hedge! Many stocks are looking pug ugly, from a chart point of view
- AKA falling knife. Especially gold, oil, etc.
Last week I attended a meetup with the savviest option guru
on the planet - Larry McMillan- who spent the whole time explaining the VIX, or
Volatility Index. This is a great way to
hedge various asset classes - even gold. I'm using the nearby VXX ETF calls.
If there is any doubt that our Fed is still behind the
"Invisible Hand" supporting markets, despite the exit of QEs, So far
this year the DJIA has crossed the 2014 closing price (17,823) a total of 21 times - the most since 1900. Either that or
the investment community has gone bipolar!
However, if there is any doubt that we are in a problematic
time - thisis the fifth day in a row for the markets to be down, the fifth of
six down weeks for major markets; and the McClellan Oscillator, which gave a
BUY signal at minus 43 (-50 is usually a short term up signal). Its cumulative
index, the Summation, is below zero, as is the Dow 30 for the year.
Other Sentiment standouts are: Sector Insider selling made a
huge reversal last week from its large selling (180 to 1) to only 16 sellers;
the Advancing stocks vs. declining (breadth) was also large on the declining
side.
Finally, the public is moving its $$ from equity (stock)
mutual funds into MMFs (money markets. For a list of my Sentiment Indicators,
please see: mktsentiment.blogspot.com - you can sign up for free (with no commercials).
| Date> | 7/24/2016 | 7/17/2015 | |
| Indices: | DJIA | 17568 | 18086 |
| NAZ | 5088 | 5210 | |
| SPX | 2079 | 2126 | |
| WklyVolume (Bshs). | naz/ny…. | 9.5/4.1 | 8.6/3.8 |
| Specul.Ratio hi=bullish | 2.32 | 2.26 | |
| Sentiment: | put/call-CBOE | 69 | 62 |
| VIX>50-alltmlow=8.8 | 13.7 | 12 | |
| Advance/Dec-NYSE.. | 645/2610 | 1896/1347 | |
| Weekly Net: | -1965 | 549 | |
| Cumulative: | 162255 | 164220 | |
| Weekly | NYSE hi/low… | 245/626 | 266/281 |
| New Hi's/Low's | Nasdaq h/l | 287/403 | 355/199 |
| McClellan | Oscillator | -43 | 28 |
| McClellanSum | .+750/-1000 | -282 | -211 |
| Newsletter | Inv.Intel -Bull | 49 | 43.7 |
| Surveys-Tues | Bear:-5yrs | 15.6 | 15.6 |
| Wed. | AAII -Bull | 32.5 | 30.8 |
| Bear | 25.6 | 23.2 | |
| COT:SPX w/w | large/small (net)k | 9k/(16k) | 11k/(23k) |
| COT:gold comm.hedg | long-short.000 | (21k) | (48k) |
| COT:OIL comm.hedg | long-short. | (257k) | (257k) |
| US$-WSJ | 88.5 | 88.6 | |
| CEOinsider | selling | .16:1 | .*180:1 |
| off.&bd b/s.vs. | 10% holder b/s | discont. | discont. |
| 3-box rev | Bullish%- | 53 | 56 |
| US equity -ICI | Fund Flows | week delay | (11.5B) |
| MMF flows | Change in $B | 16.2B | (1.4B) |
| MargDebt- top (300M) | monthly | ||
| ETF:mthlyEqty/ | Int'l/Bond-$B | ||
| 2-yr Tsy Yield: Inflation | 0.69% | 0.67% | |
| TIP (ETF) | Inflation | 112.1 | 112.02 |
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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