FANTASTIC VOYAGE:

Back from vacation, after impressing my family by placing first in guessing the midpoint on the flight to Maui (off by 23 seconds). Also the first time I had a cab to the airport overheat and not be able to continue.
Whle away, the market didn't overheat - more like a Linda Raschke-type 3-Up, 3-Down minicycle. After a flip-flop on the Recession % indicator, it will hit the waste bin, along with the Market Vane non-event number; circling the drain is the Birinyi bull/bear stat, as well.
Most indicators are lying in the midrange area, while the Bull/Bear surveys either narrowed (the Inv.Intell.) or inverted (AAII).
Short interest on IBD hit a new high, although as Barrons stated, much of that is used by nearly $2T in hedgefund long/short strategies.
Here are the actual numbers:

MktSentiment. 5/30/2008 Prev. Week.....5Yr.HI......LOW

DJIA ………. 12638……….12479………..14093............7286
Nasdaq………. 2522…………2444…………2810.............1114
S&P500…….. 1400…………1375…………1561………..776
CBOE Eq. put/call …63……………67……………..92-1/08…..........46-1/03

VIX ………. 17.8………..19.5…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 30………….30…………….76(bullish)….28(bearish)
McClellan Osc………-18………..-35……………91-5/04 br......(-81)-5/04bu
McClelSum………340…………..390…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…37.9…………47.3……….…12/04br......35-6/06bu
Bear:………… 32.2…………30.8………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……31.4/45.8……46.3/34.3……..n/a n/a
MarketVane Bulls…51……………54…………. 74br..............24bu
IBD: Short Interest- 14.3nh………13.8nh…………14.3………. 4.0
Public/NYSE Spec.-…10.4…………10.4…….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………23.8/42.8……31.8/40.9
Bullish%- …………55………….55sell…….…88 -2/04br.....19bu
*Insider corporate sellers.9:1……..17:1 ………..97…………..5
Sectors: Most Buyers: Consumer Services
Most Sellers: Technology

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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FANTASTIC VOYAGE:

ALOHA:

This issue comes a day early (and next week's a day late) due to another vacation. Last week's slaughter of stocks brought mixed reactions to the indicators. Some, such as the McClellan Oscillator at -35, plus the holiday and 1st-of-the-month kindness, would bode for a relief rally short term. Others, such as the VIX, which reached October's low spike (the all time high before the fall), has climbed back just below 20. Short interest on the NYSE hit a new record high of $60B (13.8% on the IBD chart) with Finance and Energy the most heavily shorted ETFs.
Corporate insiders were buyers of Finance, however, and Energy and Tech were the sellers' targets. Bullish per cent went to a Sell signal after last week's runoff, but even with a 6% filter it can get whipsawed.
CBOE equity put/call rose some, and OTC puts were bought before the holiday weekend.
Here are the numbers:

MktSentiment. 5/23/2008 Previous Week..5Yr.HI...... LOW

DJIA ………. 12479………..12986………..14093............7286
Nasdaq………. 2444…………2528…………2810.............1114
S&P500…….. 1375…………1425…………1561………..776
CBOE Eq. put/call …67…………….61……………..92-1/08…..........46-1/03

VIX ………. 19.5…………16.5…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 30…………..35…………..76(bullish)….28(bearish)
McClellan Osc………-35…………36……………91-5/04 br......(-81)-5/04bu
McClelSum………390……………426…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…47.3…………46……….…12/04br......35-6/06bu
Bear:………… 30.8…………29.9………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……46.3/34.3……45.2/29.7……..n/a n/a
MarketVane Bulls…54……………53…………. 74br..............24bu
IBD: Short Interest- 13.8nh……….13.4nh…………13.8………. 4.0
Public/NYSE Spec.-…10.4…………11.3…….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………31.8/40.9……36/45
Bullish%- …………55sell………62…….…88 -2/04br.....19bu
*Insider corporate sellers.17:1 …..20:1………..97…………..5
Sectors: Most Buyers: Finance (1/3 of all sectors)
Most Sellers: Energy, Technology

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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ALOHA:

THE WISDOM OF CROWDS:

The essence of Contrary Opinion is to go against the Conventional Wisdom, or majority - at least at the extremes, because of people's herdlike mentality and reliance on "experts" to influence them. But James Suroweicki, in his book the Wisdom of Crowds maintains that the experts also are victims of overconfidence in their opinions and are influenced by their peers. Studies show that congresses, juries, et.al. make decisions based on the loudest and strongest voice, whereas TV programs such as Millionaire rely on thousands of disparate opinions (Lifeline) to get more accurate answers. Which brings us to Intrade.com , the Irish betting company where, like open outcry markets, traders put money on their opinions. A few weeks ago they set high records on the odds of a Recession in '08, which was Bullish for the market in contrary fashion. Now, however, it is setting new lows betting that we may avoid one - this may indicate the market could trend lower before it rallies again to new highs.
Other extremes on the south side included a complacent VIX reading of 16.5, a recent low; the McClellan Oscillator and Summation Index are "nearing" usual high areas, as is the Bullish per cent index. Nasdaq to NYSE Volume was almost to a record high at 179, and money market cash flowed in at $23B versus a record outflow the week before at minus $78B.
Insider selling remains relatively high and short interest (IBD's ratio) is at a record high of 13.4.
On the plus side breadth is strong (although Volume remains weak), and sideline money is the 3rd greatest since the '87 and '03 rallies.

MktSentiment. 5/16/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12986………..12745………..14093............7286
Nasdaq………. 2528………….2445…………2810.............1114
S&P500…….. 1425………….1388…………1561………..776
CBOE Eq. put/call …61…………….64……………..92-1/08…..........46-1/03

VIX ………. 16.5…………..19.4…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 35……………28…………..76(bullish)….28(bearish)
McClellan Osc………36…………..22……………91-5/04 br......(-81)-5/04bu
McClelSum………426…………….304…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…46……………44.4……….…12/04br......35-6/06bu
Bear:………… 29.9…………32.3………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……45.2/29.7…….52.8/24.7……..n/a n/a
MarketVane Bulls…53……………55…………. 74br..............24bu
IBD: Short Interest- 13.4nh………13nh…………13.4………. 4.0
Public/NYSE Spec.-…11.3…………11.4…….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………36/45…… 36/45
Bullish%- …………62…………56…….…88 -2/04br.....19bu
*Insider corporate sellers.20:1…..20:1………..97…………..5
Sectors: Most Buyers: Finance
Most Sellers: Technology

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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THE WISDOM OF CROWDS:

"STABLE" ECONOMY:

When George Bush says we have a stable economy he must mean it belongs in the barn. Last week the market seemed more correlated (inversely) to record oil prices than fundamentals, yet most of the indicators went on vacation with me. The put/call ratio, VIX, market letters, even the short interest, stayed the same.
Mutual funds outflows of $6M along with ETF inflows of the same amount was a wash - yet moneymarket outflows were a record $78B. And IBD's short interest ratio hit another record of 13.0.
Here are the numbers:

MktSentiment. 5/9/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12745………..13058………..14093............7286
Nasdaq………. 2445…………..2477…………2810.............1114
S&P500…….. 1388………….1413…………1561………..776
CBOE Eq. put/call …64…………….66……………..92-1/08…..........46-1/03

VIX ………. 19.4………….18.2…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 28……………30…………..76(bullish)….28(bearish)
McClellan Osc………22…………..37……………91-5/04 br......(-81)-5/04bu
McClelSum………304…………….209…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…44.4………….40.9……….…12/04br......35-6/06bu
Bear:………… 32.3…………31.8………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……52.8/24.7…….53.3/26.3……..n/a n/a
MarketVane Bulls…55……………52…………. 74br..............24bu
IBD: Short Interest- 13nh……….12.58nh…………13.0………. 4.0
Public/NYSE Spec.-…12.1……….12.1……….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………36/45…….38/28
Bullish%- …………56……….54……….…88 -2/04br.....19bu
*Insider corporate sellers.20:1…..25:1………..97…………..5
Sectors: Most Buyers: Finance, Technology
Most Sellers: Technology

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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"STABLE" ECONOMY:

BASKET CASE-GOLD:

A Catch-22 side effect of Gold and other commodity ETF baskets recently surfaced - when GLD, which is backed by 18M oz. , experienced a selloff of shares, they had to sell 1/8 of the total spot gold - almost 2M oz.- which brought down the price of gold, causing others to sell shares, etc. etc. We can expect such volatility in others, such as grains, oil, other metals.
Meanwhile, this extended Bear rally (?) is getting long in the tooth - 2 months of a-b-c up to resistance ( on less than convincing Volume), and John Roque of Natexis' has a target of 1415 SPX which it just hit and backed off.
With the breadth indicators - McClellan Oscillator and Bullish per cent - occupying middle ground, many Sentiment factors are also mid-range. One extreme is the Nasdaq to NYSE Volume (speculation) which is at new highs -182! Also at a record is Money Market outflows - must have been that last rate cut- at -$61B.
With the help of the uptick rule loss, short interest is at a record 12.58 on the IBD scale. Finally, legal Insider selling is back up to 25:1, with Consumer Services topping both the Buy and Sell sectors.
Here are the numbers:

MktSentiment. 5/2/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13058………..12891………..14093............7286
Nasdaq………. 2477………….2422…………2810.............1114
S&P500…….. 1413………….1397…………1561………..776
CBOE Eq. put/call …66……………..67……………..92-1/08…..........46-1/03

VIX ………. 18.2…………19.6…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 30……………45…………..76(bullish)….31(bearish)
McClellan Osc………37…………..33……………91-5/04 br......(-81)-5/04bu
McClelSum………209…………….55…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…40.9…………39.1……….…12/04br......35-6/06bu
Bear:………… 31.8…………35.6………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……53.3/26.3……46.7/27.5……..n/a n/a
MarketVane Bulls…52……………51…………. 74br..............24bu
IBD: Short Interest- 12.58nh…….11.57nh……………12.58………. 4.0
Public/NYSE Spec.-…12.1……….12.1……….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………38/28…….38/28
Bullish%- …………54……….52buy……….…88 -2/04br.....19bu
*Insider corporate sellers.25:1……17:1………..97…………..5
Sectors: Most Buyers: Consumer Svc
Most Sellers: Consumer Svc (1/3 of total)

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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BASKET CASE-GOLD:

BONUS COVERAGE:

The recent March low (second of '08s Double Bottom formation) had some absolute and relative extremes in Sentiment land. The CBOE Equity put/call ratio of 94 was prominent; the McClellan Oscillator and Summation Indices, oversold at -65 and -650, respectively, called for a rally. The SPX was 7% under its 200-day MA, Bullish per cent was on a Buy signal, and both Inv.Intell. and AAII Bull/Bear surveys were inverted, a rarity. For the full matrix of March and other market bottom levels, please e-mail: leonbrnt@aol.com. You may also request being added to the e-mail alert distribution list.
Minimum measurement of the double top could take us to the Sept. and Dec. highs on the SPX and DJIA. However, upside momentum is easing at month end, both in Volume and Sentiment's retracement to the middle.Both the surveys have regained the positive Bull dominance, CEO Insider selling abated from a high 27:1 down to 17:1, still recently high. The IBD short interest ratio went ot a new 5-year high, and Bullish percent whipsawed back to a Buy signal.
Here is the matrix:
MktSentiment. 4/25/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12891………..12849………..14093............7286
Nasdaq………. 2422………….2402…………2810.............1114
S&P500…….. 1397………….1390…………1561………..776
CBOE Eq. put/call …67…………….74……………..92-1/08…..........46-1/03

VIX ………. 19.6…………20.1…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 45…………..60…………..76(bullish)….31(bearish)
McClellan Osc………33………….53……………91-5/04 br......(-81)-5/04bu
McClelSum………55…………….-65…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…39.1……….37.8……….…12/04br......35-6/06bu
Bear:………… 35.6………..38.9………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……46.7/27.5…..30.4/48.7……..n/a n/a
MarketVane Bulls…51………….46…………. 74br..............24bu
IBD: Short Interest- 11.57nh……10.95……………11.57………. 4.0
Public/NYSE Spec.-…12.1……….12.7……….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………38/28…….48/28
Bullish%- …………52buy……48sell……….…88 -2/04br.....19bu
*Insider corporate sellers.17:1…..27:1………..97…………..5
Sectors: Most Buyers: Finance (1/2 total)
Most Sellers: 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

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BONUS COVERAGE:

GET SHORTY:

Like many longterm Sentiment and Supply/Demand indicators, Short Interest cannot be closely correlated to price action, but it is obvious that if a record amount of it exists, it will add fuel to a rise in prices, with so many tyro money managers/hedge funds tuned to the same channel and shorting the markets. A recent Barron's reported the Russell 2000 ETF (IWM) had 150% of its shares shorted; the Retail Spider (XRT) had 670%, homebuilders (XHB) 177%, and Real Estate (IYR) 133%.
Overall markets are reporting SI semi-monthly now, which is very high. Whether that was a major cause of Friday's huge up day, or option expiration, is debatable, but there was no followthrough today (Monday).
Almost all the CNBC and print pundits opine that we are at "A" bottom, and the wisdom at the weekend's excellent AAPTA/TSAA Conference was also mixed. As Editor of the TSAA Quarterly Review, I will be synopsizing and reproducing documents from that event in the upcoming newsletter shortly. The speakers as a whole gave historical, lively, and humorous talks that were both professional and actionable.
As expected, last week's Resistance-breaking rally caused Sentiment to regress from Bearish in many cases, including the McClellan Oscillator which ended at +53, recently a topping area; the IBD short interest was at a new record high; the Bullish per cent went on a SELL signal, although it is still in the lower area of the PNF chart. Completing the mixed picture is the bullish inversion of both the AAII and Inv.Intell. surveys on bullish/bearish positions, yet corporate insider selling screamed to the upside at 27:1!
Here are the numbers:
MktSentiment. 4/18/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12849……….12325………..14093............7286
Nasdaq………. 2402…………2290…………2810.............1114
S&P500…….. 1390…………1332…………1561………..776
CBOE Eq. put/call …74……………84……………..92-1/08…..........46-1/03

VIX ………. 20.1………….23.4…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 60…………..72…………..76(bullish)….31(bearish)
McClellan Osc………53………….-6……………91-5/04 br......(-81)-5/04bu
McClelSum………-65……………-162…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…37.8……….37.4……….…12/04br......35-6/06bu
Bear:………… 38.9………38.5………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……30.4/48.7…..45.8/37.3……..n/a n/a
MarketVane Bulls…46………….50…………. 74br..............24bu
IBD: Short Interest- 10.95nh…..10.5……………10.95………. 4.0
Public/NYSE Spec.-…12.2………12.9……….21bl…………..1.0br
Birinyi Blogger
Bull/Bear Poll ………48/28…….30/40
Bullish%- …………48sell…….48……….…88 -2/04br.....19bu
*Insider corporate sellers.27:1……7:1………..97…………..5
Sectors: Most Buyers: Consumer Services
Most Sellers: 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

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GET SHORTY: