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Monday, September 29, 2014

JANUS - The Two-faced GOD

The definition of NT Taleb's Black Swan is a material event causing a shock that should have been foreseen. Gross's departure was probably imminent but is sending shock waves throughout the bond and ETF markets.

  Sentiment: Standouts from last week in the Sentiment area include halitosis (bad breadth) in both NYSE and Nasdaq, as well as new highs and lows, despite the great Friday rally!  Insider selling by sector was huge, but so was the buying, so that the S/B ratio came down to 25:1 from 61 the previous week.
The McClellan Oscillator, a fairly fast-twitch indicator, closed at minus 43, a BUY signal for Monday. Again, in spite of Friday's big UP day, the VIX closed up nearly 3 points w/w.  The S&P500 COT (Traders') large guys reversed from 11k to only 1k, while the small guys (dumb money?) reversed to Bullish from minus 22k to plus 35k! The two-year Treas. hit a new recent high in yield to 0.58%.
*note:  I shall be on vacay next week, away from electronic thingees.
Here are the numbers:

Date> 9/26/2014 9/19/2014
Indices: DJIA  17113 17279
  NAZ  4512 4579
SPX  1982 2010
WklyVolume (Bshs). naz/ny 9.0/3.5 10.1/4.4
Specul.Ratio hi=bullish 2.57 2.3
Sentiment: put/call-CBOE  69 60
VIX>50-alltmlow=8.8 14.9 12.1
Advance/Dec-NYSE.. 646/2592 1604/1622
Weekly Net: -1946 -18
     Cumulative: 161903 163849
Weekly  NYSE hi/low 88/315 209/187
New Hi's/Low's Nasdaq h/l 95/322 174/232
McClellan  Oscillator -43 -28
McClellanSum .+750/-1000 -55 248
Newsletter Inv.Intel -Bull:tues 48 52.5
Surveys Bear:-5yrs 15.3 15.2
AAII  -Bull :wed. 41.8 42.2
Bear  28.2 23
COT:SPX w/w large/small (net)k (1k)/35k 11k/(22k)
COT:gold  comm.hedg long-short.000 (64k) (77k)
CEOinsider selling 25:1 61:1
off.&bd b/s.vs. 10% holder b/s 175/35 175/30
3-box rev Bullish%-  70 74
US equity -ICI Fund Flows WeekDelay (2.0B)
MMF flows Change in $B 15B (16.7B)
MargDebt- top (300M) monthly  463B 460B
ETF:mthlyEqty/ Int'l/Bond-$B n/a 1100/443/272
2-yr Tsy Yield: Inflation 0.58%nh 0.57%

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, September 22, 2014

Monday, Monday

Today marks the Autumnal Equinox, and the market is reacting to it, so far. At least it's as good an excuse as the other media offerings. Breadth, as measured by the NYSE Advance/Decline line, was negative (barely) for the third week. Despite all the headlines about DJIA and S&P500 up to new highs, the underlying picture is not that great - especially for small caps.

Per Barron's Trader: Since March 2009 stocks have made new highs, the fourth longest and biggest rise in history; yet now the average stock in the SPX is DOWN 7% from its 52-week high. For one thing, only about 250 of the 500 stocks from 2008 still exist in the Index; the Wilshire 5000 went to @6500 awhile back, but is now only @2500 stocks - Survivorship bias. Also, The SPX is Cap weighted, meaning the biggest stocks (Google, Apple, ) dominate.

More of this at:   http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Although most Sentiment Indicators have regressed to the mean lately, a couple are notable: In the Commitment of Traders (COT) large traders have jumped to the Buy side, while small ones reversed to selling (see below); although Gold looks terrible weak vis-a-vis the strong Dollar, commercial traders have lightened upon their selling. Finally, insider selling, at least by sector, rose the past two weeks, while MMF flows reversed from Up $6B to Down $16B.

Here are the numbers:

Date> 9/19/2014 9/12/2014
Indices: DJIA  17279 16987
  NAZ  4579 4567
SPX  2010 1985
WklyVolume (Bshs). naz/ny 10.1/4.4 8.8/3.1
Specul.Ratio hi=bullish 2.3 2.84
Sentiment: put/call-CBOE  60 60
VIX>50-alltmlow=8.8 12.1 13.3
Advance/Dec-NYSE.. 1604/1622 718/2528
Weekly Net: -18 -1810
     Cumulative: 163849 163867
Weekly  NYSE hi/low 209/187 219/123
New Hi's/Low's Nasdaq h/l 174/232 195/148
McClellan  Oscillator -28 -51
McClellanSum .+750/-1000 248 433
Newsletter Inv.Intel -Bull:tues 52.5 57.6
Surveys Bear:-5yrs 15.2 14.1
AAII  -Bull :wed. 42.2 40.4
Bear  23 26.6
COT:SPX w/w large/small (net)k 11k/(22k) 0/(7k)
COT:gold  comm.hedg long-short.000 (77k) (98k)
CEOinsider selling 61:1 48:1
off.&bd b/s.vs. 10% holder b/s 175/30 200/40
3-box rev Bullish%-  74 75
US equity -ICI Fund Flows WeekDelay (1.3B)
MMF flows Change in $B (16.7B) 6.5B
MargDebt- top (300M) monthly  460B
ETF:mthlyEqty/ Int'l/Bond-$B 1100/443/272
2-yr Tsy Yield: Inflation 0.57% 0.56%


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, September 15, 2014

DIVIDED KINGDOM

So far this week the markets are slightly positive, as consistently predicted (short term) by the McClellan Oscillator, which ended last week at minus 51. Much happening this week as the Fed tries to parse words about rates, BABA IPO comes out, and Scotland decides whether it wants a divided or united kingdom- DK or UK? (one floor trader I worked with used to use DK as short for Don't Know!)

For what it's worth, the 2-year Treas. yield jumped to a recent high last week at .56%, bringing up the question of Interest Rates versus Inflation. Stocks seem to do well with rising interest rates, especially if due to an improving economy- however, as Jim Paulsen posits, over the past 30 years 6 of the last 7 Inflation hikes have resulted in either corrections or Bear markets - the 7th waiting until 2008! Stock market rises have come during Disinflation.

Finally, despite the NYSE's Advance/decline "bad breadth", Inv. Intlell. Bears (from wire house newsletters) remain at complacent lows. Here are the numbers:

Date> 9/12/2014 9/5/2014
Indices: DJIA  16987 17137
NAZ  4567 4582
SPX  1985 2007
WklyVolume (Bshs). naz/ny 8.8/3.1 7.0/2.4
Specul.Ratio hi=bullish 2.84 2.9
Sentiment: put/call-CBOE  60 64
VIX>50-alltmlow=8.8 13.3 12.1
Advance/Dec-NYSE.. 718/2528 1371/1837
Weekly Net: -1810 -466
     Cumulative: 163867 165677
Weekly  NYSE hi/low 219/123 402/52
New Hi's/Low's Nasdaq h/l 195/148 250/108
McClellan  Oscillator -51 6
McClellanSum .+750/-1000 433 586
Newsletter Inv.Intel -Bull:tues 57.6 56.1
Surveys Bear:-5yrs 14.1 13.3
AAII  -Bull :wed. 40.4 44.7
Bear  26.6 24
COT:SPX w/w large/small (net)k 0/(7k) 3/(9)
COT:gold  comm.hedg long-short.000 (98k) (104k)
CEOinsider selling 48:1 27:1
off.&bd b/s.vs. 10% holder b/s 200/40 175/35
3-box rev Bullish%-  75 76
US equity -ICI Fund Flows WeekDelay (5.3B)
MMF flows Change in $B 6.5B (8.7B)
MargDebt- top (300M) monthly  JULY
ETF:mthlyEqty/ Int'l/Bond-$B JULY
2-yr Tsy Yield: Inflation 0.56% 0.51%


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, September 8, 2014

UPSIDE DOWN

Thanks to the Fed Head's foot on the gas pedal, market cycles seem to be reversing, or at least unpredictably inconsistent. August, a usually bad month, from 2011 to 2013 was down, up, then down; Sept., the worst of the 12 months, was down in '11 but up the last two years.  October - the month to fear, going back to 1929, was up big in 2011, down some in '12, then straight up hugely in 2013! Finally, November, was down two years until 2013. So far this year - August was up huge 90 points, of nearly 5%.

The Investors' Intelligence Bearish %, at 13.3% last week, is the lowest since 1987. Commercial gold sellers remain high, thanks to Super Mario's QE raising the $$ by lowering the Euro strength.

Here are the numbers from the Holiday week:

Date> 9/5/2014 8/29/2014
Indices: DJIA  17137 17098
  NAZ  4582 4580
SPX  2007 2003
WklyVolume (Bshs). naz/ny 7.0/2.4 6.8/2.6
Specul.Ratio hi=bullish 2.9 2.6
Sentiment: put/call-CBOE  64 59
VIX>50-alltmlow=8.8 12.1 12
Advance/Dec-NYSE.. 1371/1837 2168/1058
Weekly Net: -466 1110
     Cumulative: 165677 166143
Weekly  NYSE hi/low 402/52 428/42
New Hi's/Low's Nasdaq h/l 250/108 230/98
McClellan  Oscillator 6 N/A
McClellanSum .+750/-1000 586 N/A
Newsletter Inv.Intel -Bull:tues 56.1 52.5
Surveys Bear:-5yrs 13.3 15.1
AAII  -Bull :wed. 44.7 51.9
Bear  24 19.2
COT:SPX w/w large/small (net)k 3/(9) N/A
COT:gold  comm.hedg long-short.000 (104k) N/A
CEOinsider selling 27:1 N/A
off.&bd b/s.vs. 10% holder b/s 175/35 N/A
3-box rev Bullish%-  76 75
US equity -ICI Fund Flows WeekDelay (2.2B)
MMF flows Change in $B (8.7B) 11B
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.51% 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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Tuesday, August 26, 2014

BETTER LATE...

After a whirlwind wedding in Redding, I settled in to do the latest Sentiment readings:
Commercial gold traders still remain high in selling - down slightly from the prior week; insider selling of stocks is still also high - both officers/board and 10% owners.
The AAII Bulls jumped up 6 % points, Bears down slightly.
I shall be off again on vaca next week with no means to update this column.

Here are the numbers:

Date> 8/22/2014 8/15/2014
Indices: DJIA  17001 16662
  NAZ  4557 4464
SPX  1988 1955
WklyVolume (Bshs). naz/ny 7.3/2.8 8.0/3.0
Specul.Ratio hi=bullish 2.6 2.7
Sentiment: put/call-CBOE  54 62
VIX>50-alltmlow=8.8 11.5 13.2
Advance/Dec-NYSE.. 2318/914 2318/909
Weekly Net: 1404 1409
     Cumulative: 165033 163629
Weekly  NYSE hi/low 405/52 234/79
New Hi's/Low's Nasdaq h/l 210/124 157/153
McClellan  Oscillator 35 29
McClellanSum .+750/-1000 378 100
Newsletter Inv.Intel -Bull:tues 49.5 46.4
Surveys Bear:-5yrs 16.2 16.2
AAII  -Bull :wed. 46.1 39.8
Bear  23.7 27
COT:SPX w/w large/small (net)k 5/(7) 4/(6)
COT:gold  comm.hedg long-short.000 (148k) (161k)
CEOinsider selling 38:1 21:1
off.&bd b/s.vs. 10% holder b/s 160/50 160:60(50sale)
3-box rev Bullish%-  75 71
US equity -ICI Fund Flows WeekDelay (3.9B)
MMF flows Change in $B 6.7B 10.5B
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.50% 0.41%

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, August 18, 2014

DOG DAYS

We are now in the Dog Days of summer - vacation time for most Europeans, Wall Streeters, and myself (Wedding in Redding, then my favorite coastal resort). Volume on the NYSE and Nasdaq was down last week. However, Insider sales of 10% stockholders jumped last week, although other insiders ( board members, officers) remained at the same pace. This blog has only recently broken these down, after keeping Sector Sales to Buys ratios for years. Probably not a meaningful signal, as the highest Sector selling in years was back in May of 2009 (when I started my DITM strategy). Sellers then were 235:1 !!!

Just as the markets bounced up off the Support levels last week, so did the McClellan Summation off the zero line. Breadth was strong - more about money flows in my Examiner.com column this week:   http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

Here are the numbers for the past two weeks:

Date> 8/15/2014 8/8/2014
Indices: DJIA  16662 16553
  NAZ  4464 4370
SPX  1955 1931
WklyVolume (Bshs). naz/ny 8.0/3.0 8.9/3.4
Specul.Ratio hi=bullish 2.7 2.6
Sentiment: put/call-CBOE  62 69
VIX>50-alltmlow=8.8 13.2 15.8
Advance/Dec-NYSE.. 2318/909 1987/1239
Weekly Net: 1409 750
     Cumulative: 163629 162220
Weekly  NYSE hi/low 234/79 106/196
New Hi's/Low's Nasdaq h/l 157/153 94/253
McClellan  Oscillator 29 -20
McClellanSum .+750/-1000 100 11
Newsletter Inv.Intel -Bull:tues 46.4 50.5
Surveys Bear:-5yrs 16.2 17.1
AAII  -Bull :wed. 39.8 30.9
Bear  27 38.2
COT:SPX w/w large/small (net)k 4/(6) (2)/5
COT:gold  comm.hedg long-short.000 (161k) (132k)
CEOinsider selling 21:1 22:1
off.&bd b/s.vs. 10% holder b/s 160:60(50sale) 150:30
3-box rev Bullish%-  71 70
US equity -ICI Fund Flows WeekDelay (3.1B)
MMF flows Change in $B 10.5B 12.8B
MargDebt- top (300M) monthly 
ETF:mthlyEqty/ Int'l/Bond-$B
2-yr Tsy Yield: Inflation 0.41% 0.45%

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, August 11, 2014

HEDGE FUN

Thanks to a surprising huge rally Friday, the week came up positive for most markets, despite the worst retracement in months - hopefully that was enough of a respite. Technicians, on the other hand, require a filter of more time (3-4 days" closes beyond a technical break), etc. to resume trend.

With August recently being a weak market month, and Sept.-Oct. even moreso, it would seem advisable to employ hedges on existing portfolios throughout this period, until the election. For more, see:    http://www.examiner.com/stock-market-in-san-francisco/brent-leonard

The resumption of uptrend also  quieted down Sentiment Indicators, including the VIX, which jumped on the downturn.
MMF (money market flows) reversed from outflows the week before to inflows. AAII  Bears dominated for a change, and the McClellan Summation (of the Oscillator) is nearing the zero line - for what that is worth. Just as the SPX bounced up off the 1900 mark after failing to reach the 2000 barrier.
Here are the numbers for last week:


Date> 8/8/2014 8/1/2014
Indices: DJIA  16553 16493
  NAZ  4370 4352
SPX  1931 1925
WklyVolume (Bshs). naz/ny 8.9/3.4 9.9/3.6
Specul.Ratio hi=bullish 2.6 2.8
Sentiment: put/call-CBOE  69 68
VIX>50-alltmlow=8.8 15.8 17
Advance/Dec-NYSE.. 1987/1239 484/2772
Weekly Net: 750 -2288
     Cumulative: 162220 161470
Weekly  NYSE hi/low 106/196 260/191
New Hi's/Low's Nasdaq h/l 94/253 149/254
McClellan  Oscillator -20 -89
McClellanSum .+750/-1000 11 287
Newsletter Inv.Intel -Bull:tues 50.5 55.6
Surveys Bear:-5yrs 17.1 16.2
AAII  -Bull :wed. 30.9 31.1
Bear  38.2 31.1
COT:SPX w/w large/small (net)k (2)/5 .3/5
COT:gold  comm.hedg long-short.000 (132k) (149k)
CEOinsider selling 22:1 22:1
off.&bd b/s.vs. 10% holder b/s 150:30 175:25
3-box rev Bullish%-  70 74
US equity -ICI Fund Flows WeekDelay (8.9B)
MMF flows Change in $B 12.8B (8.8B)
MargDebt- top (300M) monthly  464B
ETF:mthlyEqty/ Int'l/Bond-$B 1116/440/274
2-yr Tsy Yield: Inflation 0.45% 0.48%

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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