WAR of 1812

As Technicians we are skeptical of small sample size analysis, but the drop of the SPX (S&P 500) to @ the 1812 Support level at least 6 times since Dec. '13 has at least created a Stop, Look, and Listen moment. Whether this is THE bottom or A bottom, is like a Crack patient in Rehab, after the Fed's multi-year "fix" of the supposed free markets.

Most Sentiment Indicators last week returned to normal - Volume, breadth (except for the New Lows to Highs !!!); The McClellan Summation (of its Oscillator readings) dropped below minus 700, a rara avis! Previous lows hit (1514).The AAII Individual Investor Bull/Bear survey worsened, but that comes out midweek, just as the stock market reversed (Oversold, short covering. Invisible Hand).

Here are the numbers:

Date>	2016	1/22/16	1/15/16
Indices:	DJIA	16093	15988
	NAZ	4591	4488
	SPX	1906	1880
WklyVolume (Bshs).	naz/ny….	10.1/5.1	12.2/6.1
Specul.Ratio hi=bullish		1.98	2
Sentiment:	put/call-CBOE	63	93
VIX>50-alltmlow=8.8		22.3	27
Advance/Dec-NYSE..		1888/1299	461/2756
Weekly Net:		589	-2295
Cumulative:		156627	156038
Weekly	NYSE hi/low…	26/1451	46/1283
New Hi's/Low's	Nasdaq h/l	28/1055	33/1025
McClellan	Oscillator	-6	-78
McClellanSum	.+750/-1000	-770	-535
Newsletter	Inv.Intel -Bull	26.8	28.6
Surveys-Tues	Bear:-5yrs	36.1	35.7
Wed.	AAII  -Bull	21.5	17.9
	Bear	48.7	45.6
US$-WSJ		99.5	99
CEOinsider	selling		disc.
3-box rev	Bullish%-	28	27
US equity -ICI	Fund Flows	(1.6B)	WeekLate
MMF flows	Change in $B	.5B	7.9B
MargDebt- top (300M)	monthly	NOV.:	473B
2-yr Tsy Yield: Inflation		0.87%	0.85%
TIP (ETF)	Inflation	110	110.2

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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WAR of 1812

DEAD OF WINTER

The long Holiday weekend gave the market to catch  its "breadth", after such a lousy start of the year (worst ever!). Such a plunge on heavy Volume does not bode well for the upcoming weeks - it did serve to drive several Sentiment Indicators to extreme levels:
The key one - McClellan Oscillator dropped farther below the, -50 benchmark, to -77;  its concomitant Summation now minus 535. The AAII (Individual Investor) Bears at 45% to only 17% Bulls, a contrary sign. Both Advance/Declines and New Lows to Highs were huge last week.
Finally, the CBOE put/call option ratio was at a very high 93level. 21st C. highs were just above that from Nov. of '08.

Despite many global excuses for a flat 2015 and a poor start this year, the main culprit is probably the Rehab from the Fed's addicting the markets with huge debt buying - the Fed PUT. Sort of like the housewife who said "I cannot be broke - I still have checks left!!"

Here are the numbers:

Date>	2016	1/15/16	1/8/2016
Indices:	DJIA	15988	16346
	NAZ	4488	4643
	SPX	1880	1922
WklyVolume (Bshs).	naz/ny….	12.2/6.1	11.0/5.3
Specul.Ratio hi=bullish		2	2.08
Sentiment:	put/call-CBOE	93	80
VIX>50-alltmlow=8.8		27	27
Advance/Dec-NYSE..		461/2756	725/2502
Weekly Net:		-2295	-1777
Cumulative:		156038	158333
Weekly	NYSE hi/low…	46/1283	162/665
New Hi's/Low's	Nasdaq h/l	33/1025	67/546
McClellan	Oscillator	-78	-66
McClellanSum	.+750/-1000	-535	-178
Newsletter	Inv.Intel -Bull	28.6	34.7
Surveys-Tues	Bear:-5yrs	35.7	31.6
Wed.	AAII  -Bull	17.9	22.2
	Bear	45.6	38.3
US$-WSJ		99	98.5
CEOinsider	selling		Finance
3-box rev	Bullish%-	27	36
US equity -ICI	Fund Flows	WeekLate	(3.9B)
MMF flows	Change in $B	7.9B	(24.4B)
MargDebt- top (300M)	monthly	473B
2-yr Tsy Yield: Inflation		0.85%	0.93%
TIP (ETF)	Inflation	110.2	110.4

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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DEAD OF WINTER

TW3

Old timers remember TW3 - "That Was The Week That Was" - from the previous Century. It certainly was for the stock market - the largest first week decline in the 200-year history of U S stocks since the Buttonwood Agreement in the early 1800s.

The question now is - after 7 years of a Fed-led Bull market, how deep does this or any future correction/Bear market go. It looks like a Recession -global and domestic- are in order, and 7.5 years is the usual time between R's. Should one exit or hedge the market? Depends on your timeframe and goals: Retirement or current income.

Short term Sentiment says oversold, looking for at least a pause - Bullish % at a low of 36% (Aug. was 25); CBOE put/call ratio at 80 ( fear) as does the VIX and the AAII Bull/Bear newsletter show. 
More than 50% of the S&P500 stocks are in a Bear market - off 20% from there highs.
Here are the numbers:

Date>	2016	1/8/2016	1/1/2016
Indices:	DJIA	16346	17426
	NAZ	4643	5007
	SPX	1922	2043
WklyVolume (Bshs).	naz/ny….	11.0/5.3	5.3/2.5**
Specul.Ratio hi=bullish		2.08	2.12
Sentiment:	put/call-CBOE	80	73
VIX>50-alltmlow=8.8		27	18.2
Advance/Dec-NYSE..		725/2502	1128/2090
Weekly Net:		-1777	-962
Cumulative:		158333	160110
Weekly	NYSE hi/low…	162/665	150/93
New Hi's/Low's	Nasdaq h/l	67/546	143/183
McClellan	Oscillator	-66	9
McClellanSum	.+750/-1000	-178	-20
Newsletter	Inv.Intel -Bull	34.7	36.7
Surveys-Tues	Bear:-5yrs	31.6	29.6
Wed.	AAII  -Bull	22.2	25.1
	Bear	38.3	23.6
US$-WSJ		98.5	98.7
CEOinsider	selling	Finance	Finance
3-box rev	Bullish%-	36	56
US equity -ICI	Fund Flows	WeekLate	(6.0B)
MMF flows	Change in $B	(24.4B)	16B
MargDebt- top (300M)	monthly
2-yr Tsy Yield: Inflation		0.93%	1.06%
TIP (ETF)	Inflation	110.4	109.7

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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TW3

SLAY RIDE

So much for the Santa Claus rally that is supposed to bring Cheer the last week of each year! Other than weakening breadth (advance/decline, new highs/lows) last week, there was no warning of today's 450 point decline on the DJIA.
This does no bode well for the January effect, which is the buying of oversold stocks due to year end profit-taking, loss-taking, etc. In fact, it was reported last week that January has been the worst month of the year for the past decade, with April being the best. Luckily the hedge I've been employing -the TVIX has helped balance out paper losses, up nearly 20% today.
Gold also jumped up, in the face of a stronger dollar, which Conventional Wisdom has getting stronger yet this year, with rising rates - both of which remains to be seen.
Here are the Sentiment numbers:

Date>	2016	1/1/2016	12/24/2015
Indices:	DJIA	17426	17552
	NAZ	5007	5048
	SPX	2043	2061
WklyVolume (Bshs).	naz/ny….	5.3/2.5**	5.5/3.0*
Specul.Ratio hi=bullish		2.12	1.83
Sentiment:	put/call-CBOE	73	59
VIX>50-alltmlow=8.8		18.2	15.7
Advance/Dec-NYSE..		1128/2090	2853/371
Weekly Net:		-962	2482
Cumulative:		160110	161072
Weekly	NYSE hi/low…	150/93	88/215
New Hi's/Low's	Nasdaq h/l	143/183	96/237
McClellan	Oscillator	9	50
McClellanSum	.+750/-1000	-20	-137
Newsletter	Inv.Intel -Bull	36.7	n/a
Surveys-Tues	Bear:-5yrs	29.6	n/a
Wed.	AAII  -Bull	25.1	26.4
	Bear	23.6	31.5
US$-WSJ		98.7
CEOinsider	selling	Finance	n/a
3-box rev	Bullish%-	56	56
US equity -ICI	Fund Flows	week delay	(1.4B)
MMF flows	Change in $B	16B	11B
MargDebt- top (300M)	monthly		473B
2-yr Tsy Yield: Inflation		1.06%	1.01%
TIP (ETF)	Inflation	109.7	109.9

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

SLAY RIDE