WallStreetSentiment.com
Published by Mark S. Young
Equity Guardian Group, LLC.
Investment Management & Research
800.769.6980
Short-Term Sentiment:
Negative.
Intermediate-Term Sentiment:
Positive.
Intermediate-term Trend:
Positive..
Short-term (one-day) Signal:
Cover shorts on weakness and snug stops. (Last signal, "Sell, but benimble". 9-13).
Ideal Portfolio: LONG 50%
25% QQQQ
25% IWO
50% Money Market. Looking to Buy more on weakness.
The message board sentiment poll shows Bulls at 28% and Bears at 38%. This isBearish since this group is right more often than not (i.e. not a good fade). The ActualPosition Poll shows 50% at least partially long, and 25% at least partially short. Thereare just 16.67% fully short Bears. This is still showing too much Bullishness despite thedecline. The diminutive number of fully short Bears is supportive of more pullback.
The equity P/C ratio rose to 0.66 which is still neutral and a bit worrisome. The OEX PCratio fell sharply to 1.0, which is neutral and approaching Buy territory. Yesterday'shigh readings brought a sell off. If we take this lower, I think we can look for a rally.The OEX 10-Day is still at Bearish levels. The $-weighted P/C rose to 0.56, which isneutral but not very constructive. This may be a function of options expiration thisFriday. This indicator is not a consistently good short-term tool. We never use it alone,either. The CBOE 10-day P/C ratio fell to 0.92 which is still constructive. Optionssupport more correction, but longer-term higher prices.
LowRisk reported 43% (up from 29%) Bulls and Bears at 21% (well down from 47%). This isBearish, showing way too many Bulls and too few Bears. We've found that the LowRisk pollis one of the more reliable public polls. We can expect some selling to scare these folks.Last week, AAII reported 42.31% (up from 31.78%) Bulls and 32.69% (down from 37.65%)Bears. This is about what we'd expect. Thus far, this is consistent with the rally. We didget some good bottoming readings two weeks ago, so we probably have a low in place.Investors Intelligence reported a rise to 52.1% (vs. 51.1%) Bulls, and a rise to 28.1%(vs. 27.3%) Bears. This is showing rising Bearishness even as the market is rallying.That's supportive of the change in trend scenario too.
The Rydex Dynamic Bull funds saw $16MM of inflows, while the Dynamic Bear Funds hadoutflows of $18MM. Overall, the fund shifts were modestly Bearish though there was littlein the way of non-Dynamic Bear fund purchases and there were purchases of Nova andVelocity. The RSO showed a modest Bearish shift on a much larger down day. That's leaningtoward a Sell. The optimism runs high still. We still have lots of fuel for anintermediate-term rally, but the optimism is getting ahead of itself and suggestscontinued caution near term.
The Senticator is Bullish, so we're a bit long for that trading model. I didn't like it,but that's what the Senticator Model said. Note that this is a short-term speculativetrading model and has nothing to do with intermediate-term positions. We still have anawful lot of Bulls in the Message Board polls despite the decline and Rydex showed verylittle Bearishness. That suggests that we may have a bit more selling ahead. My call wasfor a two day decline starting early in the week, and then more rally. We got that, but Ithink we have more coming. It's probably going to be a Buy, especially with expirationupon us, but I'm worried at the lack of worry.
The Mechanical model went long at 124.45. The Subjective model went long 1/2 there too.Double up on a limit of 122.85.
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Not everyone likes a short-term trading model, and would like something that hangs ontobigger moves and reflects a less frenetic trading pace. If you want to know how I wouldtrade based upon the big picture and the sentiment, the following tracking portfolio isit.
Ideal ETF Portfolio (tracking portfolio):
50% Money Market
25% QQQQ at 38.80.
25% IWO at 68.05
Buy 25% IWO at 67.60.
Buy 25% QQQ at 38.90.
We've got a Buy signal. Let's get more long if we get a hint of pessimism. Check youremail late in the day.
Past performance is no guarantee of future returns. All information included in thismissive is derived from sources we believe to be reliable, but no guarantee can be made tothat effect. None of the forgoing should be construed as an offer or solicitation to buyor sell any security. The publisher may have a long or short position in the funds orsecurities discussed at any given time. We aren't your advisor, unless you have a signedcontract with us. Please review any trade that you do with your trusted advisor FIRST.
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Past performance is no guarantee of future returns. All information included in thismissive is derived from sources we believe to be reliable, but no guarantee can be made tothat effect. None of the forgoing should be construed as an offer or solicitation to buyor sell any security. The publisher may have a long or short position in the funds orsecurities discussed at any given time. We aren't your advisor, unless you have a signedcontract with us. Please review any trade that you do with your trusted advisor FIRST.
Note that we are also publishing on our private area on Traders-Talk.com, for those whowant on-line access to our charts and research.
For more on using the ISA and the various sentiment poll data, click here:
www.WallStreetSentiment.com
Mark Young
Editor
1-800-769-6980
