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Monday, March 23, 2015

HOPE AND FEAR

Any one who has traded options as well as entered March Madness Basketball pools knows the similarity of emotions with both: Hope and confidence at the start; day by day the hope turns to fear and disappointment; finally both end in loss, as expiry and the Finals occur. At least they both get your attention for awhile!The remedy for options is to SELL them, not BUY them; there is none for Basketball.

Being a "technical analyst" usually means being a Contrarian! This means going against the crowd. Last week was all about Chairwoman Yellen being "Patient" - I do not know if she meant wait awhile or visit the Doctor!

In Barron's this past week Scott Minerd writes the minority opinion (also mine) that interest rate hikes are actually GOOD for stocks, rising 6 months before as well as after the event.

Last week's Sentiment Indicators had these Contrarian gifts: The AAII (Individual Investor) Bears rose nearly 25% week over week; Insider Selling of CEOs has dropped recently (smart money); the Commitment of (futures) Traders also showed a big rise in S&P buying by large traders, with small traders  increased selling (see table below).

Most important was the backing off of smart selling by Gold Traders - finally- and the technical rise in gold recently (hoping it continues, as the $$ starts to weaken a bit after risin 25% the past year)

Here are the numbers:


Date> 3/20/2015 3/13/2015
Indices: DJIA  18127 17749
  NAZ  5026 4871
SPX  2108 2053
WklyVolume (Bshs). naz/ny…. 9.7/5.3 9.0/3.9
Specul.Ratio hi=bullish 1.83 2.33
Sentiment: put/call-CBOE  48 69
VIX>50-alltmlow=8.8 13 16.0
Advance/Dec-NYSE.. 2515/745 1411/1834
Weekly Net: 1770 -423
     Cumulative: 166509 164739
Weekly  NYSE hi/low… 422/172 180/222
New Hi's/Low's Nasdaq h/l 395/168 236/166
McClellan  Oscillator 22 -38
McClellanSum .+750/-1000 369 382
Newsletter Inv.Intel -Bull:tues 52 53.6
Surveys Bear:-5yrs 14.3 14.1
AAII  -Bull :wed. 27.2 31.6
Bear  31.5 25.4
COT:SPX w/w large/small (net)k 11k/(56k) 1k/(42k)
COT:gold  comm.hedg long-short.000 (57k) (89k)
CEOinsider selling 24:01:00 .20:1
off.&bd b/s.vs. 10% holder b/s .160:30 .160:45
3-box rev Bullish%-  72 71
US equity -ICI Fund Flows WeekDelay .3B
MMF flows Change in $B (19B) 18.2B
MargDebt- top (300M) monthly  Jan: 445B
ETF:mthlyEqty/ Int'l/Bond-$B Jan: 1219/424/308
2-yr Tsy Yield: Inflation 0.59% 0.66%
TIP (ETF) Inflation 113.76 111.51



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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Monday, March 16, 2015

TAKE A HIKE

The number one topic of finance media these days is when will the Fed hike rates after 6 years of Zero. The vast majority of talking heads opine that it will be the death knell for stocks - although I disagree, according to previous hikes. In this week's Barron's Steve Sears, the Option Guy, points out that stocks consistently rise before and after the hikes, based on average going back to 1955.

Recently I have been advising family and friends to invest for the long haul using either Vanguard or Schwab INDEX funds, preferably dividend ones. Fees from managed funds can eat up your retirement $$ all the way up to 66% going to them - per a Frontline program recently aired. Compounding annual fees! In fact, last week a spokesperson for S&P IQ (Standard & Poors staff) stated in an interview that the average managed mutual fund underperformed the Index 77 to 81% of the time since 2000; even small cap funds were weaker; and even in high volatility times - such as 2000 and 2008 they gained less.

With stocks regressing back to zero for the year last week (not counting today) Sentiment extremes looked hopeful. Contrarians like small traders increasing shorts to 40k, up from 22k; Insider selling by CEOs fell sharply from 71:1 over buyers to 20:1, even during Income Tax time.

Finally, mutual fund assets swung from $18B outflows to $18B inflows.

Here are last week's numbers:

Date> 3/13/2015 3/6/2015
Indices: DJIA  17749 17856
  NAZ  4871 4927
SPX  2053 2071
WklyVolume (Bshs). naz/ny…. 9.0/3.9 9.3/3.8
Specul.Ratio hi=bullish 2.33 2.45
Sentiment: put/call-CBOE  69 6
VIX>50-alltmlow=8.8 16.0 15.2
Advance/Dec-NYSE.. 1411/1834 843/2411
Weekly Net: -423 -1568
     Cumulative: 164739 165162
Weekly  NYSE hi/low… 180/222 362/98
New Hi's/Low's Nasdaq h/l 236/166 308/125
McClellan  Oscillator -38 -47
McClellanSum .+750/-1000 382 586
Newsletter Inv.Intel -Bull:tues 53.6 58.7
Surveys Bear:-5yrs 14.1 14.1
AAII  -Bull :wed. 31.6 39.8
Bear  25.4 23.4
COT:SPX w/w large/small (net)k 1k/(42k) 2k/(22k)
COT:gold  comm.hedg long-short.000 (89k) (123k)
CEOinsider selling .20:1  .71:1
off.&bd b/s.vs. 10% holder b/s .160:45 .160:35
3-box rev Bullish%-  71 75
US equity -ICI Fund Flows WeekDelay (1.9B)
MMF flows Change in $B 18.2B (18.6B)
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.66% 0.73%
TIP (ETF) Inflation 111.51 111.97


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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Monday, March 9, 2015

Storm Clouds

Traders in the stock market may want to think about hedging or at least watching stocks closely - we've had a great runup for 6 years (first time in history?). Several smart people are echoing this - Bill Gross says we have plateau'd; Jim Bianco sees economy slowing short term - snowstorms, dock strikes, lower oil earnings. Earnings forecasts as as negative as 2008 !!; the PMI index (Purchasing managers ) as low as '09.

On the plus side - Steve Sears of Barron's echoes my thoughts of stocks rising as interest rates do - before, during and after; our friend from the north (Santa Rosa) Charles Biderman of Trim Tabs says a record stock buyback happened in Feb.

Sentiment-wise - Today's bounceback reaffirms my McClellan Oscillator oversold number at -47 (usually around minus fifty in this short term Advance/Decline chart calls for at least a bounce; Gold is still seeing huge short sellers, and the 2-year Treas. yield jumped to a near record of 0.73, but the TIPs dropped over two points.

Here are the numbers:
Date> 3/6/2015 2/27/2015
Indices: DJIA  17856 18132
  NAZ  4927 4963
SPX  2071 2104
WklyVolume (Bshs). naz/ny…. 9.3/3.8 9.2/3.7
Specul.Ratio hi=bullish 2.45 2.49
Sentiment: put/call-CBOE  6 63
VIX>50-alltmlow=8.8 15.2 13.3
Advance/Dec-NYSE.. 843/2411 1714/1541
Weekly Net: -1568 173
     Cumulative: 165162 166730
Weekly  NYSE hi/low… 362/98 419/55
New Hi's/Low's Nasdaq h/l 308/125 343/98
McClellan  Oscillator -47 9
McClellanSum .+750/-1000 586 643
Newsletter Inv.Intel -Bull:tues 58.7 59.5
Surveys Bear:-5yrs 14.1 34.1
AAII  -Bull :wed. 39.8 45.4
Bear  23.4 20.3
COT:SPX w/w large/small (net)k 2k/(22k) 2k/(16k)
COT:gold  comm.hedg long-short.000 (123k) (136k)
CEOinsider selling  .71:1 .68:1
off.&bd b/s.vs. 10% holder b/s .160:35 .150:30
3-box rev Bullish%-  75 74
US equity -ICI Fund Flows WeekDelay 0
MMF flows Change in $B (18.6B) 10.3B
MargDebt- top (300M) monthly  445B
ETF:mthlyEqty/ Int'l/Bond-$B 1219/424/308
2-yr Tsy Yield: Inflation 0.73% 0.63%
TIP (ETF) Inflation 111.97 114.06

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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Monday, March 2, 2015

In Like A Lamb

March begins quietly, both in weather and in stocks. Last week saw Sentiment Indicators more in the neutral zone, but pointing in a positive direction. My cum Advance/Decline total reached another all time high on the NYSE, as its weekly A/D almost reached a 10:1 ratio - SOS.

VIX slid to a 13 handle, as Barron's reports the average at 19, but gold Commercials (read smart money) still remain at the high Selling level, but receding.. Still in the Commitment of Traders section, small SPX traders are shorting more each week, as large ones (smart??) are Buying.

Most significant, but not unusual this time of year (tax time): CEO Insider selling by Sector jumped to over  Million, with the ratio at 68:1, but Board members and 10% owners remained quiet.

Here are the #s:

Date> 2/27/2015 2/20/2015
Indices: DJIA  18132 18140
  NAZ  4963 4955
SPX  2104 2110
WklyVolume (Bshs). naz/ny…. 9.2/3.7 6.7/3.0
Specul.Ratio hi=bullish 2.49 2.23
Sentiment: put/call-CBOE  63 56
VIX>50-alltmlow=8.8 13.3 14.3
Advance/Dec-NYSE.. 1714/1541 1679/1543
Weekly Net: 173 136
     Cumulative: 166730 166557
Weekly  NYSE hi/low… 419/55 332/37
New Hi's/Low's Nasdaq h/l 343/98 263/84
McClellan  Oscillator 9 24
McClellanSum .+750/-1000 643 556
Newsletter Inv.Intel -Bull:tues 59.5 56.6
Surveys Bear:-5yrs 34.1 34.1
AAII  -Bull :wed. 45.4 47
Bear  20.3 17.9
COT:SPX w/w large/small (net)k 2k/(16k) 4k/(9k)
COT:gold  comm.hedg long-short.000 (136k) (144k)
CEOinsider selling .68:1 .42:1
off.&bd b/s.vs. 10% holder b/s .150:30 .160:15
3-box rev Bullish%-  74 74
US equity -ICI Fund Flows WeekDelay 0
MMF flows Change in $B 10.3B (9.0B)
MargDebt- top (300M) monthly  445B na
ETF:mthlyEqty/ Int'l/Bond-$B 1219/424/308
2-yr Tsy Yield: Inflation 0.63% 0.64%
TIP (ETF) Inflation 114.06 112.48

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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Monday, February 23, 2015

New Highs

The DJIA and SPX made new highs last week after the Presidential Holiday, with the Nasdaq a few points below its 15-year bubble high of 5049.

The upmove during the week regressed most Indicators to their mean, even Gold commercials shorted less, although still high, as gold makes a 7-week low.

My favorite Bull/Bear survey - the AAII individual investor poll- skewed to the Bull (complacent) side, as the two week totals showed 35% to 40 to 47 last week; Bears slid from 32% to 20, down to 17.
Here are the numbers:

Date> 2/20/2015 2/13/2015
Indices: DJIA  18140 18019
  NAZ  4955 4893
SPX  2110 2097
WklyVolume (Bshs). naz/ny…. 6.7/3.0 9.1/3.9
Specul.Ratio hi=bullish 2.23 2.33
Sentiment: put/call-CBOE  56 62
VIX>50-alltmlow=8.8 14.3 14.7
Advance/Dec-NYSE.. 1679/1543 2119/1143
Weekly Net: 136 976
     Cumulative: 166557 166421
Weekly  NYSE hi/low… 332/37 339/63
New Hi's/Low's Nasdaq h/l 263/84 259/125
McClellan  Oscillator 24 32
McClellanSum .+750/-1000 556 485
Newsletter Inv.Intel -Bull:tues 56.6 52.5
Surveys Bear:-5yrs 34.1 15.2
AAII  -Bull :wed. 47 40
Bear  17.9 20.3
COT:SPX w/w large/small (net)k 4k/(9k) 3k/(7k)
COT:gold  comm.hedg long-short.000 (144k) (171k)
CEOinsider selling .42:1 .38:1-1.1M
off.&bd b/s.vs. 10% holder b/s .160:15 .160:50
3-box rev Bullish%-  74 71
US equity -ICI Fund Flows WeekDelay 0
MMF flows Change in $B (9.0B) 4.3B
MargDebt- top (300M) monthly  na na
ETF:mthlyEqty/ Int'l/Bond-$B 1260/415/296
2-yr Tsy Yield: Inflation 0.64% 0.65%
TIP (ETF) Inflation 112.48 112.66

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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Monday, February 16, 2015

President's Day

As shown by the numbers below, the SPX (S&P 500)  hit an all-time high, with the DJIA 30 close behind. The Nasdaq hit a 14-year high, just off the 2000 bubble. Breadth, as measured by advance/declines, was also strong, with my cumulative A/D at a new high as well.
Lots of Insider Selling, a little early for tax time, but Insider Buying also picked up, so the ratio was 38:1 sellers - not a record but pretty strong. $1.1B in selling, with half of it in Consumer Sectors.
MMFs had a net Gain for the first time since Jan. 2. Gold commercials still are selling bigtime, but not at the record level of last week.
The Bull looks strong, as new highs mean no previous sellers to dump getting even. The Wyckoff model, a West Coast favorite, shows a possible UTAD ( upthrust after distribution) which could be a fakeout before going lower. But IMO, so much global unrest, 50% of securities inflows in the U.S. is coming from outside our borders, for safety.

Here are the numbers:

Date> 2/13/2015 2/6/2015
Indices: DJIA  18019 17824
NAZ  4893 4744
SPX  2097 2055
WklyVolume (Bshs). naz/ny…. 9.1/3.9 10.3/4.5
Specul.Ratio hi=bullish 2.33 2.29
Sentiment: put/call-CBOE  62 64
VIX>50-alltmlow=8.8 14.7 17.3
Advance/Dec-NYSE.. 2119/1143 2262/1002
Weekly Net: 976 1260
     Cumulative: 166421 165445
Weekly  NYSE hi/low… 339/63 486/111
New Hi's/Low's Nasdaq h/l 259/125 207/185
McClellan  Oscillator 32 16
McClellanSum .+750/-1000 485 414
Newsletter Inv.Intel -Bull:tues 52.5 49
Surveys Bear:-5yrs 15.2 16.3
AAII  -Bull :wed. 40 35.5
Bear  20.3 32.4
COT:SPX w/w large/small (net)k 3k/(7k) 1k/0k
COT:gold  comm.hedg long-short.000 (171k) (203k)
CEOinsider selling .38:1-1.1M .50:1
off.&bd b/s.vs. 10% holder b/s .160:50 .160:35
3-box rev Bullish%-  71 68
US equity -ICI Fund Flows WeekDelay 3.5B
MMF flows Change in $B 4.3B (16.4B)
MargDebt- top (300M) monthly  n/a
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.65% 0.65%
TIP (ETF) Inflation 112.66 113.96

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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Monday, February 9, 2015

Dead of Winter -II

Date> 2/6/2015 1/30/2015
Indices: DJIA  17824 17164
  NAZ  4744 4635
SPX  2055 1995
WklyVolume (Bshs). naz/ny…. 10.3/4.5 9.9/4.4
Specul.Ratio hi=bullish 2.29 2.25
Sentiment: put/call-CBOE  64 71
VIX>50-alltmlow=8.8 17.3 21
Advance/Dec-NYSE.. 2262/1002 1216/2032
Weekly Net: 1260 -816
     Cumulative: 165445 164185
Weekly  NYSE hi/low… 486/111 616/245
New Hi's/Low's Nasdaq h/l 207/185 216/257
McClellan  Oscillator 16 -11
McClellanSum .+750/-1000 414 297
Newsletter Inv.Intel -Bull:tues 49 53.1
Surveys Bear:-5yrs 16.3 16.3
AAII  -Bull :wed. 35.5 44.2
Bear  32.4 22.4
COT:SPX w/w large/small (net)k 1k/0k 3k/13k
COT:gold  comm.hedg long-short.000 (203k) (206k)
CEOinsider selling .50:1
off.&bd b/s.vs. 10% holder b/s .160:35 .160:35
3-box rev Bullish%-  68 62
US equity -ICI Fund Flows WeekDelay 3.5B
MMF flows Change in $B (16.4B) (2.5B)
MargDebt- top (300M) monthly  n/a n/a
ETF:mthlyEqty/ Int'l/Bond-$B 1260/415/296
2-yr Tsy Yield: Inflation 0.65% 0.45%
TIP (ETF) Inflation 113.96 115.55

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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