BACK FROM VACATION:

After a choppy three weeks going nowhere, Friday's Anniversary tank finalized what could be a Triple Top in the SPX, with Sentiment Indicators not indicating much. The NASD/NYSE Volume remains high, a speculative sign, breadth is still strong and the McClellan Oscillator remains negative. The Bull Bear surveys contrast with the AAII showing huge Bear numbers.
The CBOE equity put/call ratio remains high (Bullish), yet in Barron's option column, Larry McMillan's over all equity put/call ratio is coming off its lows - a negative for the market over the past year (very high inverse correlation).
On the downside, MMFs gained billions of $$ while equity mutual funds continued to lose them; Bullish % - a great showing of overbought SPX stocks, is high.
Below are the numbers for the past two weeks, as well as the 7-year highs and lows above that:

Date>		7Yr.HI	LOW
Indices:	DJIA	14093	6626
	NAZ	2937	1114
	SPX	1561	683
WklyVolume (Bshs).
NASD/NYSE
Specul.Ratio hi=bullish		3.15	1.59
nasd/nyse
Sentiment:	put/call-CBOE	104.11/08	42
VIX>50-alltmlow=8.8		90	8.8
Advance/Dec-NYSE..
Weekly Net:
Cumulative:		143458	71464
Weekly	NYSE hi/low	950	18
New Hi's/Low's	Nasdaq h/l
McClellan	Oscillator	May.'12:110	-100 :10/08
McClellan Sum	.+750/-1000	1568-6/03	-1514
Newsletter	Inv.Intel -Bull:tues	62.9-12/04	22.2-10/08
Surveys	Bear:-5yrs	54.4-10/08	15.6
	AAII  -Bull :wed.	(12/10)63.3
	Bear	70.3(3/09)	16.4
COT:Change w/w	large/small (net)k
CEOinsider	selling	235:1	.2.1
3-box rev	Bullish%-	88	2
US equity -ICI	Fund Flows	381B(7/07)
MMF flows	Change in $B
MargDebt- top (300M)	monthly
ETF:Eqty/	Int'l/Bond
	Billion$$ .
2-yr Tsy Yield: Inflation

 LAST WEEK'S SENTIMENT NUMBERS:

Date>

10/12/2012

10/19/2012

Indices:

DJIA

13328

13343

NAZ

3044

3005

SPX

1428

1433

WklyVolume (Bshs).

NASD/NYSE

7.7/2.9

9.3/3.6

Specul.Ratio hi=bullish

2.66

2.58

nasd/nyse

Sentiment:

put/call-CBOE

68

68

VIX>50-alltmlow=8.8

16.1

17.06

Advance/Dec-NYSE..

884/2268

1864/1288

Weekly Net:

-1768

576

Cumulative:

141457

142033

Weekly

NYSE hi/low

294/71

468/70

New Hi's/Low's

Nasdaq h/l

163/132

220/131

McClellan

Oscillator

-25

-18

McClellanSum

.+750/-1000

520

557

Newsletter

Inv.Intel -Bull:tues

45.7

42.6

Surveys

Bear:-5yrs

25.5

26.6

AAII  -Bull :wed.

30.6

28.7

Bear

38.8

44.5

COT:Change w/w

large/small (net)k

.  4/24

CEOinsider

selling

11:1

12:1

3-box rev

Bullish%-

76

76

US equity -ICI

Fund Flows

(2.3B)

1weeklag

MMF flows

Change in $B

(1.4B)

5.8B

MargDebt- top (300M)

monthly

AUG:

287B

ETF:Eqty/

Int'l/Bond

AUG:

715/270/230

Assets in

Billion$$ .

2-yr Tsy Yield: Inflation

n/a

0.30%

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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BACK FROM VACATION:

FOUR MORE YEARS?:

Readers of my blogs/Examiner columns are familiar with the Election Year stock market model since 1900 produced by Ned Davis Research - going according to plan ( an UP September), now the divergence begins:
According to the chart, from October 1 on, if the Incumbent is to win, all is well and the market (i.e. the economy) will rise until year end. Only if the Incumbent is to lose (not get termed out) will October and the rest of 2012 be flat to down. Of course, as we know, there are exceptions.

Last week's prediction of the market letting off the gas (not hitting the brake) held true, with extremes in the overbought area. Things have modulated - the McClellan Oscillator fell to minus 29; the AAII bull/bear ratio is even. The speculative NASD to NYSE Volume ratio is again high, as is the CBOE Equity put/call ratio - both Bullish. Contrarily, the MMFund flows reversed again to INFLOWS and equity mutual funds lost funds.

Next week I shall again (!) be on vacation to San Diego, away from my desktop until the following week. Since I am visiting my cousin who is a V.P. at J. P. Morgan, I want to show him an example of my DITM strategy using his stock. It demonstrates how one can earn 10% with almost NO risk. For details, please see:

http://ditmcalls.blogspot.com.

There are also two important investment meetings coming up next week, listed in my Examiner column ( the reader can subscribe to the column for future meetups and columns at:

http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Here are the  Sentiment numbers:

 

Date>		9/28/2012	9/21/2012
Indices:	DJIA	13437	13579
	NAZ	3116	3179
	SPX	1440	1460
WklyVolume (Bshs).
NASD/NYSE		8.9/3.6	9.2/4.4
Specul.Ratio hi=bullish		2.47	2.09
nasd/nyse
Sentiment:	put/call-CBOE	69	64
VIX>50-alltmlow=8.8		15.73	13.98
Advance/Dec-NYSE..		1080/2083	1371/1768
Weekly Net:		-1003	-397
Cumulative:		142058	143061
Weekly	NYSE hi/low	426/38	505/32
New Hi's/Low's	Nasdaq h/l	293/75	332/74
McClellan	Oscillator	-29	4
McClellan Sum	.+750/-1000	749	888
Newsletter	Inv.Intel -Bull:tues	51	54.2
Surveys	Bear:-5yrs	24.5	24.5
	AAII  -Bull :wed.	36.1	37.5
	Bear	36.5	33.8
COT:Change w/w	large/small (net)k	0/24.	9/22.
CEOinsider	selling	44:1	42:1
3-box rev	Bullish%-	76	79
US equity -ICI	Fund Flows	1 wk lag	(4.8B)
MMF flows	Change in $B	8.5B	(10.3B)
MargDebt- top (300M)	monthly
ETF:Eqty/Int'l/Bond	million$$ .
2-yr Tsy Yield: Inflation		0.23%	0.27%

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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FOUR MORE YEARS?:

SO GOOD, SO FAR!:

Despite the oft-publicized warning that September is the cruelest month for stocks, the Election Year projections from Ned Davis Research that I've been writing about here and the Examiner column: 

http://www.examiner.com/stock-market-in-san-francisco/brent-leonard, have been right on. 

according to it, however, next week is the critical market juncture. Of the 28 EYs from 1900, if the Incumbent is to win, or the summation of all EYs (including termed out), the market will keep rising, with bumps, of course. The U.S. fiscal year (not cliff) ends this month, the election, Euro, etc. can produce volatility.

Sentiment indicators are issuing an overbought warning for now, hopefully just a sideways move. Facts such as the End of Quarter rebalancing by institutions, put/call ratio, bullish per cent, even newsletter surveys show caution.  Last week the CEO Insider Selling was 42:1 after hitting a high of 78 :1 the week before. Last week selling brought the McClellan Oscillator near zero, but the cum. Summation is way high at 888. NYSE new lows to highs were almost 20:1 again. 

Awhile back Arch Crawford, who trained at Merrill Lynch under Bob Farrell, but relies a lot on alignment of stars, points out the current Vernal Equinox as a climactic moment for stocks.

Here are the results from last week:

 

Date>		9/21/2012	9/14/2012
Indices:	DJIA	13579	13593
	NAZ	3179	3183
	SPX	1460	1465
WklyVolume (Bshs).
NASD/NYSE		9.2/4.4	8.6/3.6
Specul.Ratio hi=bullish		2.09	2.39
nasd/nyse
Sentiment:	put/call-CBOE	64	56
VIX>50-alltmlow=8.8		13.98	14.5
Advance/Dec-NYSE..		1371/1768	2317/837
Weekly Net:		-397	1480
Cumulative:		143061	143458
Weekly	NYSE hi/low	505/32	722/36
New Hi's/Low's	Nasdaq h/l	332/74	403/81
McClellan	Oscillator	4	63
McClellan Sum	.+750/-1000	888	820
Newsletter	Inv.Intel -Bull:tues	54.2	51.1
Surveys	Bear:-5yrs	24.5	25.5
	AAII  -Bull :wed.	37.5	36.5
	Bear	33.8	33
COT:Change w/w	large/small (net)k	9/22.	5/5.
CEOinsider	selling	42:1	78:1
3-box rev	Bullish%-	79	79
US equity -ICI	Fund Flows	1 wk lag	(2.8B)
MMF flows	Change in $B	(10.3B)	8B
MargDebt- top (300M)	monthly		277B
ETF:Eqty/Int'l/Bond	million$$ .		702/264/226
2-yr Tsy Yield: Inflation		0.27%	0.26%

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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SO GOOD, SO FAR!:

COMMENCEMENT AT "SUGAR" HIGH:

Far be it for me to try to fall into the trap of timing the stock market, however, I have more confidence that markets behave more irrationally due to Sentiment and human behavior than pure random walking ( although that does exist very short term).

That said, several yellow caution signs appeared after the Bernanke put rally of last week that causes me to be cautious near term. Technically, it appears that a 5% correction would be possible and healthy, with the rally resuming into year end. As mentioned before, the Election year model since 1900 (an average of 28 election cycles) points to a down to flat market if the incumbent is destined to lose.

Here are my concerns: Barron's columnists Michael Santoli and Steven Sears both point to Larry McMillan's put/call ratio levels calling for a correction. Since the QE3 put option Implied Volatility (IV) is lower than it was in 2007, before the financial meltdown. A very tight inverse correlation between the SPX and equity put/call is seen in Barron's looking like last April. 

For several weeks my CEO insider selling ratio has skyrocketed (over buys) as shown below - doubling w/w; in fact, CEOs leaving office is up 25%, possibly avoiding the Fiscal Cliff. Especially healthcare and financials. Both Bernanke and Draghi seem to be desperate: "whatever it takes".

Elsewhere, the NYSE new highs/lows was a huge 722/36 (more than 20:1); speculative Volume (Nasdaq over NYSE) is still high. newsletter surveys were mild, but they come out Tuesday and Wednesday - before the big Fed runup. Finally, both the Bullish % and McClellan Oscillator are flashing warning/toppy signs - even the McClellan Summation aggregate.

Here are the numbers:

Date>		9/14/2012	9/7/2012
Indices:	DJIA	13593	13306
	NAZ	3183	3136
	SPX	1465	1437
WklyVolume (Bshs).
NASD/NYSE		8.6/3.6	6.6/2.7
Specul.Ratio hi=bullish		2.39	2.44
nasd/nyse
Sentiment:	put/call-CBOE	56	62
VIX>50-alltmlow=8.8		14.5	14.4
Advance/Dec-NYSE..		2317/837	2445/678
Weekly Net:		1480	1767
Cumulative:		143458	141978
Weekly	NYSE hi/low	722/36	520/58
New Hi's/Low's	Nasdaq h/l	403/81	293/86
McClellan	Oscillator	63	35
McClellan Sum	.+750/-1000	820	616
Newsletter	Inv.Intel -Bull:tues	51.1	51
Surveys	Bear:-5yrs	25.5	24.5
	AAII  -Bull :wed.	36.5	33.1
	Bear	33	33.1
COT:Change w/w	large/small (net)k	5/5.	(2)/3
CEOinsider	selling	78:1	34:1
3-box rev	Bullish%-	79	74
US equity -ICI	Fund Flows	1 wk lag	(2.8B)
MMF flows	Change in $B	8B	(.8B)
MargDebt- top (300M)	monthly	277B	JULY:
ETF:Eqty/Int'l/Bond	million$$ .	702/264/226	JULY:
2-yr Tsy Yield: Inflation		0.26%	0.26%

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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COMMENCEMENT AT "SUGAR" HIGH:

BACK TO NORMAL:

Summer's over and the crazy season starts, especially in an election year. The Election Year model for September is off to a raging start - according to it, October will let us know who is to win the next Presidency.
The Indicators have settled back to the middle again, not enough for a reversal yet, but Caution. The Inv. Intell. Bull/Bear survey is getting stretched, and the AAII one is exactly even. Breadth is strong, with the McClellan Oscillator approaching the +50 level (my sell signal) - it is now at +35.
Here are the numbers.

Date>		9/7/2012	8/31/2012
Indices:	DJIA	13306	13090
	NAZ	3136	3066
	SPX	1437	1406
WklyVolume (Bshs).
NASD/NYSE		6.6/2.7	6.6/2.8
Specul.Ratio hi=bullish		2.44	2.36
nasd/nyse
Sentiment:	put/call-CBOE	62	72
VIX>50-alltmlow=8.8		14.4	17.4
Advance/Dec-NYSE..		2445/678	1693/1437
Weekly Net:		1767	256
Cumulative:		141978	140211
Weekly	NYSE hi/low	520/58	323/61
New Hi's/Low's	Nasdaq h/l	293/86	163/87
McClellan	Oscillator	35	-5
McClellan Sum	.+750/-1000	616	558
Newsletter	Inv.Intel -Bull:tues	51	48.9
Surveys	Bear:-5yrs	24.5	24.5
	AAII  -Bull :wed.	33.1	34.7
	Bear	33.1	32.6
COT:Change w/w	large/small (net)k	(2)/3	1/1.
CEOinsider	selling	34:1	110:1
BalticDryIndex	GlobalEcon		discont.
3-box rev	Bullish%-	74	71
US equity -ICI	Fund Flows	(3.7B)	1 wk lag
MMF flows	Change in $B	(.8B)	(2.6B)
MargDebt- top (300M)	monthly	JULY:	277B
ETF:Eqty/Int'l/Bond	million$$ .	JULY:	702/264/226
2-yr Tsy Yield: Inflation		0.26%	0.23%

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

BACK TO NORMAL:

SEPTEMBER SONG:

Now that the Dog Days of Summer are over with Labor Day, coupled with some critical upcoming meetings and events, stocks should see more Volatility - hopefully Volume as well. Last week's Indicators are mostly benign with a few standouts:
Insider (legal) Selling was high at 110 to 1; yet the CBOE equity put/call ratio hit 72, showing fear. Breadth, as measured by new highs/lows and advances/declines, still is positive - Volume is speculative with Nasdaq high versus NYSE.
 For more on September's direction guess see -
http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Here are the numbers:

Date>		8/31/2012	8/23/12**
Indices:	DJIA	13090	13057
	NAZ	3066	3053
	SPX	1406	1402
NASD/NYSE	WklyVolume (Bshs).	6.6/2.8	n/a
nasd/nyse	Specul.Ratio hi=bullish	2.36	n/a
Sentiment:	put/call-CBOE	72	67
Barron's	VIX>50-alltmlow=8.8	17.4	15.1
	Advance/Dec-NYSE..	1693/1437	n/a
	Weekly Net:	256	n/a
	Cumulative:	140211	n/a
Weekly	NYSE hi/low	323/61	n/a
New Hi's/Low's	Nasdaq h/l	163/87	n/a
McClellan	Oscillator	-5	-9
McClellan Sum	.+750/-1000	558	667
Newsletter	Inv.Intel -Bull:tues	48.9	47.3
Surveys	Bear:-5yrs	24.5	24.7
	AAII  -Bull :wed.	34.7	42
	Bear	32.6	25.9
COT:Change w/w	large/small (net)k	1/1.	n/a
CEOinsider	selling	110:1	n/a
BalticDryIndex	GlobalEcon	discont.	discont.
3-box rev	Bullish%-	71	70
US equity -ICI	Fund Flows	1 wk lag	(4.5B)
MMF flows	Change in $B	(2.6B)	0
MargDebt- top (300M)	monthly	JULY:	277B
ETF:Eqty/Int'l/Bond	million$$ .	JULY:	702/264/226
2-yr Tsy Yield: Inflation		0.23%	n/a

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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SEPTEMBER SONG:

EARLY EDITION:

Due to an early start of a vacation (along with the rest of the world), here is an abbreviated Sentiment update: specifically newsletter surveys that come out mid-week.
Since rising to the April 2 high on the SPX of 1422 it again hit that  number Monday with a Candlestick Hammer. Despite that the Inv.Intell. Bull/Bear, and especially the AAII one are both getting stretched to the complacency side. Both the McClellan Oscillator and Summation are only halfway to a speculative top yet; the Bullish % is getting close to a top.
Followers of my DITM (deep-in-the-money) covered call strategy can see how one can make a profit even if the stock drops, at:    http://www.examiner.com/stock-market-in-san-francisco/brent-leonard
DITM is IMO the optimal strategy in a sideways to down market, which has been the case since the October '07 high, and probable future. More also at:

http://ditmcalls.blogspot.com

Here are the numbers:

Date>		8/23/12thurs	8/17/2012
Indices:	DJIA	xxx	13275
	NAZ	xxx	3076
	SPX	xxx	1418
NASD/NYSE	WklyVolume (Bshs).		8.0/2.8
nasd/nyse	Specul.Ratio hi=bullish xx		2.86
Sentiment:	put/call-CBOE	xx	61
Barron's	VIX>50-alltmlow=8.8		13.5
	Advance/Dec-NYSE.. xx		1995/1157
	Weekly Net:	xx	838
	Cumulative:  xx		139955
Weekly	NYSE hi/low	xx	359/45
New Hi's/Low's	Nasdaq h/l	xx	190/125
McClellan	Oscillator	-9	29
McClellan Sum	.+750/-1000	667	656
Newsletter	Inv.Intel -Bull:tues	47.3	43.6
Surveys	Bear:-5yrs	24.7	26.6
	AAII  -Bull :wed.	42	36.8
	Bear	25.9	28.1
COT:Change w/w	large/small (net)k		1/(1)
CEOinsider	selling		25:1
BalticDryIndex	GlobalEcon		discont.
3-box rev	Bullish%-	70	70
US equity -ICI	Fund Flows	1 wk lag	1 wk lag
MMF flows	Change in $B		11.7B
MargDebt- top (300M)	monthly	JUNE: 284 B
ETF:Eqty/Int'l/Bond	million$$ .	JUNE: 686/258/222
2-yr Tsy Yield: Inflation		0.28%	0.30%

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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EARLY EDITION: