Last time, I said that I was going to look for higher prices on Monday, and a two daypullback during the week. My best guess was for it to begin on Tuesday and for it to be awonderful buy. I additionally expected the market to be higher on the week and with thelate week to be firm. Monday we waffled, Tuesday we pushed up to high, then began driftinglower into a low on Wednesday. We rallied smartly into Friday. I'm taking a solid A, andnot an A+ because I thought we'd be higher on Monday. Still, I don't think that many couldhave done much better.
Last Monday, the Mechanical model went long at 120.25. The Subjective model went long 1/2at 120.25 and another 1/2 at 119.30. All were exited at 120.77. Chalk one of up for theSenticator and a little extra for me.
The Fearless Forecasters are again rather Bullish, but last time they were and we got ourrally. The "Smart Money" guys are again 100% Bullish, too. The Senticator issolidly Bullish. We've got a lot of Bulls, but the trend is up. I suppose that weSHOULD have a lot of Bulls. One thing that I've learned over the years is that even thougha lot of folks are Bullish, the market can still go up. We can be cautious, but we shouldstill be Bullish unless the trend turns.
The message board sentiment poll shows Bulls at 51% and Bears at 27%. Plenty of Bulls, butthese guys are usually right and have been on a day by day basis. The Actual Position Pollshows 50% at least partially long and 27% at least partially short (about the same as lastweek!). There are 23.08% of the pollees fully short, which is interesting. We have fewshort Bears, but those who are are VERY confident. That's not a sign of a top in my view.We should expect some change in this data by Monday, but for now, this data looks OK forhigher prices.
The equity P/C ratio rose to 0.66, which is odd for such a nice rally. The Dollar-weightedP/C rose to 0.57, which is neutral and also surprising, given the rally. The VIX neutral,coming off of a Sell.
Last week, AAII reported 44% Bulls (vs. 42% last week) and 23% Bears (vs. 25% last week).That's a pretty flat reading, and doesn't give us much help. I'd have preferred morestubborn Bears. Investors Intelligence reported 54.6% Bulls, and 23.2% Bears which is justa bit more Bullish than it was last week. Frankly, this makes me nervous, but it's notenough to make me at all Bearish. LowRisk reported 37% Bulls, up from 29% last week andBears at 37%, well down from 54% last week.
The Rydex Dynamic Bull fund assets increased by $7MM, while the Dynamic Bearish fundassets decreased by $29MM. The overall shifts were generally Bullish, with one good shiftinto the non-Dynamic Nasdaq fund. The RSO showed a solid Bullish shift on a big rally,which is about what you'd expect and not particularly excessive. Friday morning's Buy fromthe RSO was a nice winner.
