Market breadth is usually measured by Advancing stocks
versus Declining ones, or New Highs versus New Lows. In this incessant Bull
market rally, higher advances have been the norm, as have the New Highs,
especially in the NYSE. Such an upward right
translation is thought of as a strong market, with the majority of
investors on the Buy side. At some point
that will change - suddenly and drastically. As Harry Domash cited at one Money
Show talk I attended: The Trend is your Friend, until it Bends at the End!
Usually a 10 to 1 ratio of the above indicators is something
to be monitored, being a bit unusual; last week, however, the NYSE New Hi/Lo
total reached a 20:1 ratio - something I've never seen before. Thanks greatly
to the Fed's zero interest rate policy (ZIRP), this market keeps getting
stronger. Barron's columnist Randall Forsyth opines that many corporations,
such as Monsanto, are using low cost debt to buyback their own stock which
could perpetuate the move.
How long this will last is unpredictable, but the last 3
Augusts have seen declines of at least 3%, also reports Barron's. Last week,
all three major indices set new highs - the DJIA, SPX, and Nasdaq. Market
action around holidays is usually positive, especially if around the first of
the month. The VIX - volatility indicator- also hit a recent low, signifying
complacency.
Finally, as seen below, for what it's worth in indicating
Inflation, the 2-year Treasury yield it a recent high of .51%; the 10-year
yield in France , however, is
at a 300- year low, with Germany
and Japan
close behind.
Here are the numbers from the holiday-shortened week:
| Date> | 7/3/14*hol | 6/27/2014 | |
| Indices: | DJIA | 17068 | 16851 |
| NAZ | 4485 | 4397 | |
| SPX | 1985 | 1960 | |
| WklyVolume (Bshs). | naz/ny | 6.3/2.6 | 9.5/3.9 |
| Specul.Ratio hi=bullish | 2.42 | 2.44 | |
| Sentiment: | put/call-CBOE | 52 | 53 |
| VIX>50-alltmlow=8.8 | 10.3 | 11.3 | |
| Advance/Dec-NYSE.. | 1944/1276 | 1817/1414 | |
| Weekly Net: | 668 | 403 | |
| Cumulative: | 164731 | 164063 | |
| Weekly | NYSE hi/low | 599/30 | 556/66 |
| New Hi's/Low's | Nasdaq h/l | 307/51 | 224/98 |
| McClellan | Oscillator | 5 | 13 |
| McClellanSum | .+750/-1000 | 1053 | 1000 |
| Newsletter | Inv.Intel -Bull:tues | 57.6 | 60.2 |
| Surveys | Bear:-5yrs | 16.1 | 16.3 |
| AAII -Bull :wed. | 38.5 | 37.2 | |
| Bear | 22.4 | 21.1 | |
| COT:SPX w/w | large/small (net)k | n/a | .6/6 |
| COT:gold comm.hedg | long-short.000 | n/a | (131k) |
| CEOinsider | selling | 20:1 | 52:1 |
| off.&bd b/s.vs. | 10% holder b/s | 175:25 | 175:20 |
| 3-box rev | Bullish%- | 84 | 83 |
| US equity -ICI | Fund Flows | WeekDelay | (2.6B) |
| MMF flows | Change in $B | 13.1B | 5B |
| MargDebt- top (300M) | monthly | 428B | |
| ETF:mthlyEqty/ | Int'l/Bond-$B | 1069/428/276 | |
| 2-yr Tsy Yield: Inflation | 0.51% | 0.46% | |
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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