CYCLE-LOGICAL:

The recently failed January Barometer - the month of January ending at a loss- is just one piece of a "nesting" of cycles that do not bode well for 2010: the zero year of the Decennial cycle is the worst of the 10, over 11 previous cycles; the Presidential, or 4-year Kitchin cycle has produced a large selloff since WWII; Martin Pring's 18-19 year cycle, which he calls the Lost Decade, as we saw similarly in Japan recently, also sees an alternating Bull to sideways/down cycle going back 200 years.

The good news is (for me) that my book on an alternative investment strategy to zero interest rates - Zero (In)Tolerance  should be ready for publication any day now. Any readers who are "FED" up with the punitive short term rates for retirees, prudent investors - pushing them into riskier investments (see declining Money Market Fund Flows below), might want to check this under-$20 book when released by Amazon's Createspace.com. More info can be had at www.brentleonard.com, also new.

Sentimentally, MMF flows were negative for the 5th week in a row, but for the first time, U.S. Equity flows turned negative, after the recent decline.

Despite the negative 40% of Inv.Intell. people surveyed calling for a correction - first time since 1983, both the I.I. and the AAII remain inverted intheir Bull/Bear ratios - a Bullish sign FOR the market. Also low is the Nova/Ursa fund ratio of longs to shorts.

Here are the numbers:

DJIA:	10099	10012	14093	6626
Nasdaq:	2183	2141	2805	1114
S&P 500:	1075	1066	1561	683
CBOE Eq. put/call:	69	69	96-10/08	46-1/03
VIX:	22.7	26.1	90	8.8
McClellan Osc:	1	-69	108	-100
McClellan Sum:	154	299	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	34.1	38.9	63	22.21
InvestorsIntel.Bear:	38.9	40.0	54.4	16
AAII Bull:	36.8	29.2	n/a	n/a
AAII Bear:	41.9	43.1	n/a	n/a
Nova/Ursa Mutual Funds:	0.40	0.51	2.2	0.56
US Equity-1 week lag	n/a	-2.2B
Money Market Flows	-6.7B	-13.6B
ETF equity:Monthly Totals	Dec.777B	Nov.738BB
Baltic Dry Index:	2571	2685	11700	663
Bullish %:	64	64	88	2
Insider Corporate Sellers:	11:1	28:1	108:1	2.4:1

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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CYCLE-LOGICAL:

GUNG HAY FAT CHOY:

Year of the Tiger (except for Woods, of course). Along with the New part of New Year, I have a new website: http://www.brentleonard.com, a new email: brentleonard59@gmail.com to replace aol, and a new book, to be published any day now (more found at the website on this).

For the curious, the book - Zero (In)Tolerance- is about an alternative to negative interest rates. If the Fed had lowered to a paltry 3% instead of zero, investors would be happier, would have $150B / year more to "Consume" with, instead of borrowing, and gov't debt - Stimulus - would be much lower.

Only the banks and carry-traders benefited from zero, and if banks are too big to fail, where did the word Bank-rupt come from?

Back to Sentiment - the CBOE Equity put/call ratio rose to a recent record of 69, due to the recent correction; the McClellan Oscillator remains under minus 50, an oversold level. Both surveys became inverted last week, with Bears over Bulls - a good sign for the market.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10012	10067	14093	6626
Nasdaq:	2141	2147	2805	1114
S&P 500:	1066	1073	1561	683
CBOE Eq. put/call:	69	68	96-10/08	46-1/03
VIX:	26.1	24.6	90	8.8
McClellan Osc:	-69	-93	108	-100
McClellan Sum:	299	546	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	38.9	40.0	63	22.21
InvestorsIntel.Bear:	40.0	23.3	54.4	16
AAII Bull:	29.2	35.0	n/a	n/a
AAII Bear:	43.1	36.7	n/a	n/a
Nova/Ursa Mutual Funds:	0.51	0.68	2.2	0.56
US Equity-1 week lag		8.9B
Money Market Flows	-13.6B	-21.9B
ETF equity:Monthly Totals	Dec.777B	Nov.738BB
Baltic Dry Index:	2685	3223	11700	663
Bullish %:	64	73	88	2
Insider Corporate Sellers:	28:1	8:1	108:1	2.4:1

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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GUNG HAY FAT CHOY:

NERVOUS BREAKDOWN:

Many of the technicians and media talking heads are focused on the S&P500 Support level of 1085, which we broke through last week. More often than not, once a breakdown occurs through support, a retest to the "Ice" also happens - if it fails, the market recedes still more.

SPECIAL NOTE: Due to the advice of my IT I am changing my email from aol to: brentleonard59@gmail.com.
Please make this change - aol will forward for awhile yet.

Nothing spectacular from the Sentiment world. I did notice the last time the AAII Bears exceeded the Bulls was on Nov.6, the start of a nice rally. Volume picked up to new recent highs, but hardly a climactic capitulation. One other extreme was the McClellan Oscillator at -93, after not following my advice to turn the market up last week - this makes it more serious. Most other Indicators just regressed towards their means.

Here's the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10067	10172	14093	6626
Nasdaq:	2147	2205	2805	1114
S&P 500:	1073	1091	1561	683
CBOE Eq. put/call:	68	68	96-10/08	46-1/03
VIX:	24.6	27.3	90	8.8
McClellan Osc:	-93	-79	108	-100
McClellan Sum:	546	930	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	40.0	52.2	63	22.21
InvestorsIntel.Bear:	23.3	18.9	54.4	16
AAII Bull:	35.0	40.0	n/a	n/a
AAII Bear:	36.7	34.7	n/a	n/a
Nova/Ursa Mutual Funds:	0.68	0.79	2.2	0.56
US Equity Flows	1 week lag	1.3B
Money Market Flows	-21.9B	-46.0B
ETF equity:Monthly Totals	Dec.777B	Nov.738BB
Baltic Dry Index:	3223	3170	11700	663
Bullish %:	73	77	88	2
Insider Corporate Sellers:	8:1	14:1	108:1	2.4:1

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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NERVOUS BREAKDOWN:

4 DAYS AWAY:

My friend and colleague, Prof. Charles Bassetti likes to cite the 4 days away trend - if an up or down move is 4 days in one direction, it is usually going to last much longer. Looking at the S&P500 over the past several months, that is certainly the case, as it was last week.  Although today's rally is a bit underwhelming, it did stop the descent at 3 days - time will tell if the 5% correction was enough. Pete Najarian also mentioned the fact that a/o January expiration a whole lot of LEAP puts (including mine) expired.

Extremes last week include the VIX, which leapt up 10 points, from 17 to 27 on the violent downswing of the markets; the CBOE put/call went to an extended 68 - also Bullish for the market was the McClellan Oscillator, falling to -79; and MMF flows were hugely negative.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10172	10609	14093	6626
Nasdaq:	2205	2288	2805	1114
S&P 500:	1091	1136	1561	683
CBOE Eq. put/call:	68	56	96-10/08	46-1/03
VIX:	27.3	17.9	90	8.8
McClellan Osc:	-79	-10	108	-100
McClellan Sum:	930	1064	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	52.2	53.4	63	22.21
InvestorsIntel.Bear:	18.9	15.9	54.4	16
AAII Bull:	40.0	47.4	n/a	n/a
AAII Bear:	34.7	26.9	n/a	n/a
Nova/Ursa Mutual Funds:	0.79	0.73	2.2	0.56
US Equity Flows	1 week lag	2.2B
Money Market Flows	-46.0B	-21.7B
ETF equity:Monthly Totals	Nov 738B	Oct 591B
Baltic Dry Index:	3170	3235	11700	663
Bullish %:	88	83	88	2
Insider Corporate Sellers:	14:1	38:1	108:1	2.4:1

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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4 DAYS AWAY:

PRING IS HERE!:

This past weekend Martin Pring and partner Joe Turner ( former President of the TSAA technical securities group) held a 3+ hour investment meeting at Golden Gate Univ.in San Francisco which was probably the most comprehensive, actionable presentation given anywhere for a number of years. Found at www.pringturner.com website, this presentation, called the Lost Decade, compares our past and future decades to the failed 20-year Japanese market - economically and securities-wise.

The upshot was that Treasuries, especially 20-year and Intermediates 7-10 could start tanking any day (with yields breaking out to the upside), Industrial Commodities should be the asset class of choice, with stocks heading higher (after a correction) for the near future.
The ongoing imbroglio that I helped start by my seeking Barron's Michael Santoli's views on gov't intervention into the stock market (why not? They are everywhere else lately) resulted in a sharp refutation of a "conspiracy theory" by him. This even continues in his column this weekend. Trimtabs' Charles Biderman, who is the master of liquidity flows (for many of the hedge funds, etc.) opined that much of the March stock market rally was due to aftermarket futures trading by the gov't/ which, as with Bernanke, could cause all sorts of problems if the "stimulus" is stopped or removed. True or not, it does make sense that it is one of the few things that they can control with a Plunge Protection Team, alive since well before the 21st C. Employment and healthcare aren't going too well, The fullness of time will tell!

Back to sentiment - the option expiration week (which I call exasperation week) saw a volatile week with innumerable Sell indications -although they haven't dropped the market to date (conspiracy again). The Inv.Intell.Bulls hit a high of 53%, not seen since Oct. '07 (a day that will last.....)

Breadth and sentiment are shown overbought by Bullish % at 83, Nova/Ursa funds at 0.73, and Insider selling at 38:1, down from its recent highs. My cumulative Adv./Decl. is at an alltime high, and new highs to lows on the NYSE was 810 to 3.

Here are the numbers:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10609	10618	14093	6626
Nasdaq:	2288	2317	2805	1114
S&P 500:	1136	1145	1561	683
CBOE Eq. put/call:	56	52	96-10/08	46-1/03
VIX:	17.9	18.1	90	8.8
McClellan Osc:	-10	33	108	-100
McClellan Sum:	1064	1008	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	53.4	48.3	63	22.21
InvestorsIntel.Bear:	15.9	16.9	54.4	16
AAII Bull:	47.4	41.0	n/a	n/a
AAII Bear:	26.9	26.0	n/a	n/a
Nova/Ursa Mutual Funds:	0.73	0.75	2.2	0.56
Mutual Fund Flows:1 wk delay	n/a	-.7B
Money Market Flows	-21.7B	14B
ETF equity:Monthly Totals	Nov 738B	Oct 591B
Baltic Dry Index:	3235	3149	11700	663
Bullish %:	83	82	88	2
Insider Corporate Sellers:	38:1	58:1	108:1	2.4:1

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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PRING IS HERE!:

DEUS EX MACHINA:

Over the past few months I have noted in this blog that several indicators have gone to extremes, without any apparent resulting reaction; I have also noted that the normal Fall corrections - lousy September, October crashettes, etc.- have also been absent.

One possible explanation has surfaced, from a Smart Money article by the esteemed TrimTabs writer of institutional money flows-Charles Biderman of Santa Rosa: Over the past year, $600B has gone into the market, creating (in a 10:1 leverage ratio) $6T in new stock market cap since March. This source of this amount that is unaccounted for can most likely be attributed to the U.S. Government purchasing stock index futures, not as speculation, but as a support when futures indicate weakness - thereby preventing a shock to the financial system. Like supporting the Treasury market it is legal, but irregular. The question is, as with the Stimulus, is what happens when the steroid injections cease?

This week, as the markets reach new recent highs, breadth is enormous, with the NYSE new highs at 858 vs. 6 new lows!

Insider selling again increased to 58:1, and both the Bullish per cent and Nova/Ursa are at high levels - Bearish for the market.

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10618	10428	14093	6626
Nasdaq:	2317	2269	2805	1114
S&P 500:	1145	1115	1561	683
CBOE Eq. put/call:	52	61	96-10/08	46-1/03
VIX:	18.1	21.7	90	8.8
McClellan Osc:	33	-1	108	-100
McClellan Sum:	1008	863	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	48.3	51.1	63	22.21
InvestorsIntel.Bear:	16.9	15.6	54.4	16
AAII Bull:	49.2	49.2	n/a	n/a
AAII Bear:	23.0	23.0	n/a	n/a
Nova/Ursa Mutual Funds:	0.75	0.62	2.2	0.56
Mutual Fund Flows:1 wk delay	n/a	3B
Money Market Flows	14B	22B
ETF equity:Monthly Totals	Nov 738B	Oct 591B
Baltic Dry Index:	3149	3005	11700	663
Bullish %:	82	79	88	2
Insider Corporate Sellers:	58:1	51:1	108:1	2.4:1

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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DEUS EX MACHINA:

MERRY X-MISS - NO SANTA CLAUS RALLY THIS YEAR:

Just as cycles sometimes invert (tops instead of cyclic lows), 2009 was a Contrarian's dream: no bad Sept., no October Crash, etc. - so many talking heads with egg on their faces. Also, the Santa Claus rally, so often found between Xmas and New Year's Eve, failed to materialize as well.

The last week understandably showed very weak Volume and breadth, except for the New Highs/Lows (only5 on the NYSE). The Bullish % is getting toppy, but still rising, at 79, on a Buy signal;   my cumulative A/D total is near a record high; Inv.Intell. Bears hit a new low of 15.6. The Burke Bulls divided by Total Bull+Bears is the worst for the market since July '07! The Insider Selling was at a recent record of 51:1 - but the last week of the year is often the silly season of book-squaring. Tune in next week!

Here is the table:

MktSentiment	Last Week	Prev. Week	5 Yr HI	5 Yr LOW
DJIA:	10428	10520	14093	6626
Nasdaq:	2269	2285	2805	1114
S&P 500:	1115	1126	1561	683
CBOE Eq. put/call:	61	58	96-10/08	46-1/03
VIX:	21.7	19.5	90	8.8
McClellan Osc:	-1	59	108	-100
McClellan Sum:	863	757	1568	-1514
Newsletter Surveys
InvestorsIntel.Bull:	51.1	52.2	63	22.21
InvestorsIntel.Bear:	15.6	16.7	54.4	16
AAII Bull:	49.2	37.7	n/a	n/a
AAII Bear:	23.0	37.7	n/a	n/a
Nova/Ursa Mutual Funds:	0.62	0.67	2.2	0.56
Mutual Fund Flows:1 wk delay	n/a	3B
Money Market Flows	22B	2.59B
ETF equity:Monthly Totals	Nov 738B	Oct 591B
Baltic Dry Index:	3005	3258	11700	663
Bullish %:	79	77	88	2
Insider Corporate Sellers:	51:1	28:1	108:1	2.4:1

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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MERRY X-MISS - NO SANTA CLAUS RALLY THIS YEAR: