for the week from 4/19/4 to 4/23/4
From the Institutional Sentiment & Analysis Report Published on 4/17/4
Results of the Fearless Forecaster Sentiment Poll taken after the close on 4/16/04
Response was to this question: "At the end of next week will the S & P 500 close up (bull), down (bear), or unchanged/no opinion (neutral)?"
Weekly BULLS: 38%
Weekly BEARS: 33%
Our `Smart Money' Poll was equally Neutral as Bearish and twice as Bullish as either.
The Senticator is Bullish.
Last week, I said that I was going to go on record as looking for an up day at least part of Monday, a sharp decline on Tuesday, and then a decent rally into Thursday and maybe Friday. Now, we rallied on Monday, got killed on Tuesday, made a closing low on Wednesday and drifted higher into Friday. I don't think I could have called that much better, especially the sharp decline on Tuesday. You'd think that the market Gods were reading the ISA Weekly. I think that's an A quality prediction.
The Senticator was bullish, so the Mechanical Model went long and took a modest -0.62% loss. I smelled some weakness coming, however, so my subjective approach took a 1/2 short position and then doubled up on the decline. I managed to make an average 0.16% profit, which beats a poke in the eye, considering the week.
The Fearless Forecasters are evenly split with a bit of a Bullish bias and a solid neutral contingent. The Smart Money is fairly Bullish, but last week they were too. The Senticator is Bullish, which means that we're likely to get some sort of a rally next week, but I'm not that sanguine about the market's prospects. Seems like the even FF's might be predicting another top.
Rydex asset flows showed a small $4MM shift into of the Dynamic Bull funds and a large $30MM inflow to the Dynamic Bear funds. The Nasdaq was down pretty big on the day, so that explains part of that shift, but there was still a big S&P buy in the Dynamic Bear fund. The RSO shows a decent shift to Bearishness, which is, counter to market's action and must be considered to be Bullish.
Last week, AAII reported 64% Bulls up from 59% and 14% Bears down from 20%. Gee wiz, that's a lot of Bulls! Low Risk reported 35% Bulls down from 46% Bulls and 33% Bears, up from 23% Bears. That's a good sized Bearish shift and I think that folks may be fighting this trend. Investors Intelligence reported 50% Bulls up from 48.5% Bulls and 20% Bears down from 22.8% Bears. Lots and lots of Bulls. Heads up. I don't think that these polls have had time to catch up to the market, but they aren't supportive of higher prices, over all, I think. In fact, I think they are buying the dip.
Message board sentiment shows 53% Bulls, and 29% Bears. That's a whole lot of Bulls. The actual position poll posted on Thursday evening, we came away with 46% at least partially long, and 25% short or partially short. No matter how you slice it, this data is not Bullish.
The equity P/C ratio fell a tad to 0.61, which isn't much to work with, but it was expiration.
The Senticator is Bullish, so again we know that there is likely to be some sort of tradable rally next week. The problem is that the Fearless Forecasters are evenly split and Smart Money has been a bit of fade. This suggests that we have some possible selling ahead of us, too. Also, the Message Board sentiment polls all are showing a whole lot of Bulls, and that has to be begging for a decline again. This could be tricky. I don't like how many Bulls there are, but the Senticator is Bullish, and if we don't see any bad news over the weekend, we ought to see some rally. I suspect that if we get an early rally, especially thanks to those Bears over at Rydex, but we shouldn't be greedy. I think that the week is going to end down. I'll go on record as predicting a rally on Monday and possibly Tuesday, but thereafter, I expect the market to fade. If the market is down hard on Monday and Tuesday, we ought to look for a reversal up late in the week to give the Senticator it's rally.
The Mechanical Senticator Trading model will go long a full position (limit 114.5). My subjective approach will take a 1/2 long position at the open (limit 114.5, good for the day). If we trade down hard early in the week, we'll double up. If we get filled at the open and the market rallies to 116.10, my subjective approach will sell.
Thanks for your time,
Mark Young
President
Equity Guardian Group, LLC.
Investment Advisory
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