DON'T BEARS HIBERNATE IN WINTER?:

When President Bush says the Economy is "stable" does he mean it is where they keep the horses? Intrade.com, the odds-betting website, puts Recession odds at a recent high of 64, which, contrarily, is Bullish for the stock market. As the Chinese symbol (and veteran market pundits) indicate, Crisis also means Opportunity!
Fundamentals indicate a similarity to 1929 (worst 3 market days since then), 1987, and the Japanese meltdown: Record high Oil, Gold, Grains. Farmland has peaked and is dropping. Financials are in leverage trouble, and there was an "Echo" crash @ 6 years after the big one - 1937, 1980, 1994. The dollar was falling due to budget and trade deficits. Market breadth was and is terrible, both A/D and New Highs.
Although optimists point out that there is just under $1T in SWFs (soveriegn wealth funds), the questions remain - do they want to put there money here, or in emerging and developing markets; do they want real estate or stocks, and do we want Communist China and Muslim Mid-East to take even minor stakes in our companies?
Fortunately, on the Sentiment side, there are Bullish signs - Bearish ON the market, Bullish FOR the market:
The CBOE put/call ratio of 68 is quite high; surveys show higher Bear numbers -55% for AAII; Public to "remaining" Specialists' shorting and short interest are at record or near record highs. CEO legal insider selling is low, at 7 last week, and unsmart money (Mutual Funds) continue to show outflows, into money market funds.
Finally, old reliable Bullish per cent is at 38%, a buying area (although it remains on a sell signal).
Here are the numbers:
Mktsentiment. 1/04/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12800………..13366………..14093..............7286
Nasdaq………. 2504………….2674…………2810.............1114
S&P500…….. 1411…………1478…………1561………..776
CBOE Eq. put/call …68…………..62……………91-8/07…..........46-1/03

VIX ………. 23.9…………20.7…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 64nh………….48……………64(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-23……………5……………91-5/04 br......(81)-5/04bu
McClelSum………-336…………….-313…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…52.2………….54.9………..62.9-12/04br......35-6/06bu
Bear:………… 24.5…………23.1………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……25.7/55.2……..30/50……..n/a n/a
MarketVane Bulls…55…………….n/a…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …10.0nh…….9.86nh….……9.86………. 4.0
Public/NYSE Spec.-…12.1………..10.4…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………45/41………48/30
Bullish%- ………38……………46……….…88 -2/04br.....36bu
*Insider corporate sellers.7………..15:1………..97…………..6
Sectors: Most Buyers: Healthcare, Finance (50% of total)
Most Sellers: Tech, Healthcare (50%)

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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DON'T BEARS HIBERNATE IN WINTER?:

APPLE- A CORE HOLDING?:

My yearend prediction for '08 (or longer) is a Black Swan event that might hit Apple Computer. I saw a comparison picture on TV of a young person's inner ear before and after using and abusing an iPod, with volume to the max in noisy places. It was not pretty, and I wondered how long it would take for the class action lawyers to circle and attack like they did with cigarette makers. It could be the excuse to bring apple back into the double-digits.
The overall market is a different story. Dan Sullivan of The Chartist cites the Specialist shorting (those that are left) is the 3rd lowest in 5 years, and short interest is at record levels.
My indicators show Bullish numbers coming off lows in UBS Investor Confidence and CEO insider selling; and the Market Vane polling shows even more inverted Bull/Bear ratios.
Finally, well over half of insider buying is again in the financial area - 15M shares of the total 25M; sellers also include finance, along with tech and energy.
Here are the numbers:
Mktsentiment. 12/28/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13366………..13450………..14093..............7286
Nasdaq………. 2674………….2692…………2810.............1114
S&P500…….. 1478………….1484…………1561………..776
CBOE Eq. put/call …62……………60……………91-8/07…..........46-1/03

VIX ………. 20.7………….18.5…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 48……………42……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………5…………….16……………91-5/04 br......(81)-5/04bu
McClelSum………-313………….-415…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…54.9………….56.5………..62.9-12/04br......35-6/06bu
Bear:………… 23.1………….22.4………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……30/50…………35.9/47.2……..n/a n/a
MarketVane Bulls…n/a……………56…………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …9.86nh…….8.87….……9.86………. 4.0
Public/NYSE Spec.-…10.4………..10…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………48/30………52/32
Bullish%- ………46……………52……….…88 -2/04br.....36bu
*Insider corporate sellers.15:1……11:1………..97…………..6
Sectors: Most Buyers: Finance
Most Sellers: Tech, Finance

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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APPLE- A CORE HOLDING?:

NOWHERE TO NOW HERE:

The DJIA is less than 100 points from where it entered the latest Trading Range last June, and has had a wild ride in the form of a Megaphone - not a pleasant thought if it turns out to be distribution rather than re-accumulation!
After an ugly December sentiment readings have regressed to the mean thanks to a Santa rally (so far). The put/call ratio and VIX have quieted down; the A/D line and McClellans are neutralized, although last week's New Highs to New Lows were a 1:6 with year-end selling.
Bull/bear surveys, reported Wednesday, were leaning toward bullish complacency, although the best indicator - the AAII - inverted to 36/47, which is always welcome. Insider selling and Public shorting dropped precipitously, and the Bullish per cent - stocks on a buy signal - actually dropped more than its 3 box (6%) stop, giving a SELL signal.
All the above calls for tic-tacs for the bad breadth!
Finally, AMG reports huge outflows - $15B - from mutual funds, but an equal amount of inflows from ETFs.
Here is the data:

Mktsentiment. 12/21/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13450………..13339………..14093..............7286
Nasdaq………. 2692………….2635…………2810.............1114
S&P500…….. 1484………….1467…………1561………..776
CBOE Eq. put/call …60……………84……………91-8/07…..........46-1/03

VIX ………. 18.5………….23.3…………….44.. 9/02 bu........10.0-7/05 br
Intrade.com-DJIA-atm/
Recession% 57/42…………50/47……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………16…………..-17……………91-5/04 br......(81)-5/04bu
McClelSum………-415…………..-324…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…56.5………….53.3………..62.9-12/04br......35-6/06bu
Bear:………… 22.4………….25.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……35.9/47.2…….47.6/35.7……..n/a n/a
MarketVane Bulls…56……………58…………. 74br..............24bu
UBS investor confidence.50……….44!nl ………178……………44
(monthly change)
IBD: Short Interest- …8.87………..8.72….……8.95………. 4.0
Public/NYSE Spec.-…10………….14.7…..……18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………52/32………43.3/33.3
Bullish%- ………46……………52……….…88 -2/04br.....36bu
*Insider corporate sellers.11:1……22:1………..97…………..6
Sectors: Most Buyers: Finance
Most Sellers: Tech, Finance

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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NOWHERE TO NOW HERE:

DOW(n) JONES AVERAGES:

Or, as the limbo dancers dare: "How Low Can You Go?". Thanks to the unanimity of the talking (and writing) heads calling for a huge December rally, we've seen a depressing continuation of the Trading Range which started last June.
Newsletter surveys (which are out on Wednesday - at the start of the recent decline) seem to be buying into the rally. Fortunately, a couple of extremes are boding favorably for a Santa rally (which normally occurs between Xmas and New Year's): the CBOE Equity put/call ratio shot up to 84 last week, just off its '04 high of 87; the UBS Investor confidence (a monthly figure) is way low at 44. Cash is exiting Mutual Funds, but zooming into ETFs, while money market inflows abated considerably.
Finally, Insider selling action shot up to 22:1, with Healthcare the new leader.
Here are the stats:
Mktsentiment. 12/14/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13339………..13625………..14093..............7286
Nasdaq………. 2635………….2706…………2810.............1114
S&P500…….. 1467…………1504…………1561………..776
CBOE Eq. put/call …84……………65……………91…..........46-1/03

VIX ………. 23.3…………20.8…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 47……………44……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-17…………58……………91-5/04.........(81)-5/04
McClelSum………-324…………..-439…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…53.3…………49.4………..62.9-12/04......35-6/06
Bear:………… 25.6…………27.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……47.6/35.7…….40.7/39.8……..n/a n/a
MarketVane Bulls…58……………56…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.72…………8.57….……8.95………. 4.0
Public/NYSE Spec.-…14.7………….14…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………51.7/24.1……..48.3/27.6
Bullish%- ………52………………53……….…88 -2/04...... 36
*Insider corporate sellers.22:1………14:1
Sectors: Most Buyers: Finance
Most Sellers: Healthcare

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

DOW(n) JONES AVERAGES:

REST STOP:

After a stealth 1,000 point rally on the DJIA ( 200 on Nasdaq Comp., and 100 on SPX) the past two weeks, the Fed's imminent decision might be a good time to stop and reload for the Santa Claus rally at yearend. The new highs in yield-providing Utilities bodes well for the market, so says TA John Roque.
With several indicators coming off last week's Bullish (read oversold) extremes - such as put/call ratios, surveys, the new Recession expectation - the McClellan Oscillator at 58 is overbought short term.
Longer term, Paul Desmond of Lowry's thinks the thin breadth of A/D, stocks below MAs, and weak NH/NLows is Bearish.
Finally, Money Market inflows were at a high $48B level - let's hope there are no credit problems with these instruments!

Here is the weekly data:

Mktsentiment. 12/07/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13625………..13371………..14093..............7286
Nasdaq………. 2706…………2660…………2810.............1114
S&P500…….. 1504…………1481…………1561………..776
CBOE Eq. put/call …65…………..73……………91…..........46-1/03

VIX ………. 20.8…………22.9…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 44……………47……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………58…………..40……………91-5/04.........(81)-5/04
McClelSum………-439………….-644…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…49.4…………47.3………..62.9-12/04......35-6/06
Bear:………… 27.6…………29………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……40.7/39.8…….28.6/56.1……..n/a n/a
MarketVane Bulls…56……………52…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.57…………8.11….……8.95………. 4.0
Public/NYSE Spec.-…14……………14.2…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………51.7/24.1……..48.3/27.6
Bullish%- ………53………………47Buy……….…88 -2/04...... 36
*Insider corporate sellers.14:1………..9:1
Sectors: Most Buyers: Finance
Most Sellers: Tech ,Energy

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

REST STOP:

THE WISDOM OF CROWDS:

As I looked back to a book review I did over a year ago on Surowiecki's best-seller I was amazed at the similar concepts to the one I just did on The Black Swan, about crowds such as the Millionair "Lifeline" and the Iowa Election Market, are more accurate than experts. Ironically, this seems diametrically opposite to Contrary Opinion of Mackay, Humphrey Neil, et.al., but somehow they coexist effectively.
I mention this because a new Indicator has come up on the radar - from www.intrade.com, one that predicts the odds of a Recession, which contrarily predicts the stock market quite effectively. With a high of 59% (Bullish for stocks) and a low of 31%, we are at 47%.
Extremes from last week include several signals nearing their 5-year highs (or lows) - Public to Specialist shorting at 14 (vs. 18 high); the UBS Investor Optimism breached its low at 44, down from 70 the prior week; the AAII Bears reached 56, with the I.I. (Invest.Intell.) at 29. And the Bullish % was up 10 points, a Buy signal off of a reversal low of 37.
Short term negatives for stocks include a +40 on the McClellan Oscillator, very weak NH/NLs, and a weakening of the CBOE put/call and VIX ratios.
Please see below:
Mktsentiment. 11/30/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13371……….12980………..14093..............7286
Nasdaq………. 2660…………2596…………2810.............1114
S&P500…….. 1561…………1440…………1561………..776
CBOE Eq. put/call …60……………73……………91…..........46-1/03

VIX ………. 22.9………….25.6…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 47……………46 ……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………40…………..-28……………91-5/04.........(81)-5/04
McClelSum………-644……………-663…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…47.3………...47.9………..62.9-12/04......35-6/06
Bear:………… 29………….26.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……28.6/56.1…….25.6/52.7……..n/a n/a
MarketVane Bulls…52…………….54…………. 74..............24
UBS investor confidence..44!nl ………70 ………178……………44
(monthly change)
IBD: Short Interest- …8.11……….8.42….……8.95………. 4.0
Public/NYSE Spec.-…14.2………..11.96…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………48.3/27.6……57.1/28.6
Bullish%- ………47B…………….37……….…88 -2/04...... 36
*Insider corporate sellers.9:1…………8:1
Sectors: Most Buyers: Finance, Consumer Services
Most Sellers: Tech , Healthcare

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

THE WISDOM OF CROWDS:

CMJ: CRITICAL MARKET JUNCTURE:

Both in cyclical timing and indices' lows, if we don't start a rally in the next few days, and continue down, all hell will break loose. Many sentiment indicators are at oversold extremes, where they could break, not bend.
The ISEE call/put(newly revised to just an inadequate hourly quote), similar to the CBOE Equity put/call ratio , has been deleted in favor of a new one - the Odds of Recession for '08, supplied by Intrade.com. A contrary indicator, 59% odds of a Recession is a market bottom, while 31% calls for a market top - we are currently at 46%.
Not only are the indices at strong support levels, the New Lows to New High ratios are double-digit; the McClellan Summation is negative 663, AAII Bears at 52%, with other surveys agreeing.
Finally, the all-important Bullish per cent is at a low 37% - an oversold bottom.
Here are the stats:
Mktsentiment. 11/23/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12980……….13177………..14093..............7286
Nasdaq………. 2596…………2637…………2810.............1114
S&P500…….. 1440…………1459…………1561………..776
CBOE Eq. put/call …73……………76……………91…..........46-1/03

VIX ………. 25.6……….25.5…………….44.. 9/02........10.0-7/05
Intrade.com-
Recession% 46 ………….n/a……………59(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-28…………-54……………91-5/04.........(81)-5/04
McClelSum………-663…………..-417…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..….47.9………..51.1………..62.9-12/04......35-6/06
Bear:………… 26.6………..26.7………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……25.6/52.7……33/49.5……..n/a n/a
MarketVane Bulls…54……………58…………. 74..............24
UBS investor confidence..70………70 ………178……………53
(monthly change)
IBD: Short Interest- …8.42………..8.36….……8.95………. 4.0
Public/NYSE Spec.-…11.96……….10.34…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ………57.1/28.6……on vaca…….
Bullish%- ………37……………40……….…88 -2/04...... 36
*Insider corporate sellers.8:1…….. 7:1
Sectors: Most Buyers: Finance
Most Sellers: Tech

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

CMJ: CRITICAL MARKET JUNCTURE: