Despite loads of corporate cash and low prices, there's no truth to the rumor that Hostess is in merger talks with Dell, to be renamed Ding Dong Dell! (budabump).Nor is it true that, sharing the U S Postal Service problems, that FedEx and UPS will merge, and be called FedUp - with Bernanke the new CEO.
On to the important stuff - overvaluations of the Sentiment Indicators (found at the blog: www.mktsentiment.blogspot.com). With indices at multi-year highs and a huge January run up ( named for that two-faced god) both breadth and sentiment signals are getting even more stretched.
The Nasdaq to NYSE Volume ratio is near its record high (speculative); new highs vs. new lows are way dominant, although the Advances and Declines have moderated, as shown by the McClellan Oscillator, near zero. Pushing complacency to the limit is the Investors' Intelligence (wire house releases) Bull to Bear ratio, as well as the AAII - the Individual Investor. Also speculative is the Margin Interest amount, well over $300B.
Finally, CEO Insider Selling ( the legal kind) is still creeping higher, although this is one of the weaker Indicators; the record of 235:1 sellers to buyers was in May of '09, the beginning of a huge stock market rally. Who says they know what their company is doing? It has been over 500 days since a 10%, so at least a mild correction could provide a buying opportunity - or Not!
As noted in the previous column, there are several investment meetups taking place in and around San Francisco this week. I have been invited to update my 4-year-old conservative covered-call strategy at the S.F. Options Group this Saturday, along with other speakers. This is a support/sharing group of people fairly new to options - free, unless regularly attending (which gives access to speakers' notes on Yahoo). Persons interested in options are invited - the opening of each meeting is the introduction of all present, with a commonality of interests and Bay Area locations.
Thank you for reading the column - I am now back to #4 of 20 stock market column writers for the Examiner.com (which means I get my ugly mug posted somewhere!).
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