The current Market Meter Average of 3.33 is a Neutral rating, and is identical to the 3.33 of last month. Furthermore, all nine of the factors used remained unchanged from last month. Note: The range for Neutral is between 2.5 and 3.5.
As shown in the right sidebar, the covered calls investing strategy corresponding to this overall Neutral sentiment is to "on-average sell 1% out-of-the-money covered calls for the nearest expiration month." Thus, new positions for Feb2011 expiration will be established in accordance with this guideline.
For a more detailed explanation of each of the Covered Calls Advisor's nine indicators, please refer to this prior blog post on that topic -- link. These nine factors can be categorized into macroeconomic (the first 3 indicators in the chart above), momentum (next 2 indicators in the chart), value (next 3 indicators), and growth (the last indicator).
The Covered Calls Advisor is currently tracking two additional factors: (1) The Conference Board's Leading Economic Index; and (2) Estimated Future Inflation -- four sub-factors being tracked here are the money multiplier, the velocity of money, capacity utilization, and the 10-Year T-Bond minus 10-Year TIPS 'Breakeven Rate'. A decision on whether or not to add these two factors into the Overall Market Meter rating system will be made within the next several months.
Your comments or questions/clarifications regarding this post are welcomed.
Please click on the "comments" link below. If you prefer to remain anonymous, email me at the address shown in the upper-right sidebar.
Regards and Godspeed,
Jeff
