7 replies to this topic

[nimblebear]

These pessimistic readings come even as the DJIA is just off one of its most prolific winning streaks in history and is fresh off a new all-time high six days ago. Moreover, the 10-week moving average of the percentage of bears is currently 40.5%, also a high level. The 10-week moving average of the percentage of bears peaked at 43.0% at the major bear-market low during 2002. Moreover, the 50-week moving average of the percentage of bears is currently 37.3%, a very high level seen during only two other periods since tracking began in the 1980s. Those periods were October 1990-July 1991 and March-May 2003, both of which were near major market bottoms. The extreme readings in the 50-week moving average of the percentage of bears, during those periods, peaked at 41.6% on Jan. 31, 1991, and 38.1% on April 10, 2003. We are still very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then. From between the hedgies...

[qqqqtrdr]

These pessimistic readings come even as the DJIA is just off one of its most prolific winning streaks in history and is fresh off a new all-time high six days ago. Moreover, the 10-week moving average of the percentage of bears is currently 40.5%, also a high level. The 10-week moving average of the percentage of bears peaked at 43.0% at the major bear-market low during 2002. Moreover, the 50-week moving average of the percentage of bears is currently 37.3%, a very high level seen during only two other periods since tracking began in the 1980s. Those periods were October 1990-July 1991 and March-May 2003, both of which were near major market bottoms. The extreme readings in the 50-week moving average of the percentage of bears, during those periods, peaked at 41.6% on Jan. 31, 1991, and 38.1% on April 10, 2003. We are still very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then.


From between the hedgies...

Niblebear:

I'm now long.... The bearish readings and Sentiment are just to bearish. With these readings we will always jump of the 50-day MA on the indices. I now believe we are headed to new highs. The bounce on Friday was just to strong. For bearishness I will keep my eye on the 10-day average CBOE Put/Call Ratio. I firmly believe that this reading will need to be below .90 before I will even consider going short again. Also the AAII Sentiment firmly shows bearish sentiment among Institutional Investors. I believe this too will need to at least go Neutral before it is safe to enter shorts.

With that said, I do not believe the economy is in great shape long term. I do see strengthening now in the Dollar, and lower oil prices over the weekend. If lower oil prices start being reality, this market will likely continue upward.

I do see some topping action such as the low TRIN on Friday. Also, we have QQQQ Max Pain at 46 with QQQQ closer to 47. With that such statistics, I feel the week will be flat, before we going up the week after. That is just my current read......


Barry

[Russ]

Latest data shows the index folks are net short but equity long in the options world, oex index holders tends to be the smart money they say, say any rally here is likely going to be limited here but I am short term bullish. Index Options Volume Call Put Total 717,452 1,372,402 2,089,854 Equity Options Volume Call Put Total 1,088,763 649,997 1,738,760

[Tor]

These pessimistic readings come even as the DJIA is just off one of its most prolific winning streaks in history and is fresh off a new all-time high six days ago. Moreover, the 10-week moving average of the percentage of bears is currently 40.5%, also a high level. The 10-week moving average of the percentage of bears peaked at 43.0% at the major bear-market low during 2002. Moreover, the 50-week moving average of the percentage of bears is currently 37.3%, a very high level seen during only two other periods since tracking began in the 1980s. Those periods were October 1990-July 1991 and March-May 2003, both of which were near major market bottoms. The extreme readings in the 50-week moving average of the percentage of bears, during those periods, peaked at 41.6% on Jan. 31, 1991, and 38.1% on April 10, 2003. We are still very close to eclipsing the peak in bearish sentiment during the 2000-03 market meltdown, which is astonishing considering the macro backdrop now and then.


From between the hedgies...

How true how amazing.

[Russ]

Lets not forget these guys http://www.tsptalk.com/sentiment.html whose sentiment poll predicted a big sell off last week and is now bullish, although perhaps weakly.

How to benefit:
If the ratio is 1.25 or less, a buy signal is given. Stay in the buy allocation, using the allocation in either method #1 or #2 below, until a sell signal is given (ratio of 2.00 or higher). Stay in the sell allocation (100% G fund) until another buy signal is given.

Trading results using the survey as a contrarian indicator. Two allocations:
Method > 1.99 = Sell < 1.26 = Buy 2006 Result
2007 Result*
1) 100% G 100% S +27.96% +13.20%
2) 100% G 35%C, 35%S, 30% I +25.37% +8.90%

* thru 6/08/07


Week S&P 500 S&P 500 Buy/
From: To: Bulls Bears Ratio gain/loss Close Votes Sell
06/11/07 - 06/15/07 46% 38% 1.21 -1 434 B
06/04/07 - 06/08/07 66% 18% 3.67 -1 -1.87% 1507.67 444 S
05/29/07 - 06/01/07 46% 36% 1.28 -1 1.36% 1536.34 395 B
05/21/07 - 05/25/07 46% 37% 1.24 -1 -0.46% 1515.73 361 B
05/14/07 - 05/18/07 45% 39% 1.15 -1 1.12% 1522.75 440 B
05/07/07 - 05/11/07 46% 36% 1.28 -1 0.02% 1505.85 430 S
04/30/07 - 05/04/07 59% 24% 2.46 -1 0.77% 1505.61 416 S
04/23/07 - 04/27/07 49% 34% 1.44 -1 0.65% 1494.07 419 S
04/16/07 - 04/20/07 45% 34% 1.32 -1 2.17% 1484.35 350 S
04/09/07 - 04/13/07 63% 20% 3.15 -1 0.63% 1452.85 381 S
04/02/07 - 04/06/07 44% 37% 1.19 -1 1.61% 1443.76 392 B
03/26/07 - 03/30/07 54% 26% 2.08 -1 -1.06% 1420.86 439 S
03/19/07 - 03/23/07 39% 40% 0.98 -1 3.62% 1436.11 401 B
03/12/07 - 03/16/07 44% 36% 1.22 -1 -1.20% 1385.95 360 B
03/05/07 - 03/09/07 38% 42% 0.90 -1 1.13% 1402.85 390 B
02/26/07 - 03/02/07 56% 22% 2.55 -1 -4.41% 1387.17 357 S
02/20/07 - 02/23/07 56% 26% 2.15 -1 -0.30% 1451.19 316 S
02/12/07 - 02/16/07 56% 22% 2.55 -1 1.22% 1455.54 312 S
02/05/07 - 02/09/07 51% 30% 1.70 -1 -0.71% 1438.06 307 B
01/29/07 - 02/02/07 44% 35% 1.26 -1 1.84% 1448.39 309 B
01/22/07 - 01/26/07 40% 38% 1.05 -1 -0.58% 1422.18 278 B
01/16/07 - 01/19/07 51% 30% 1.70 -1 -0.02% 1430.50 366 S
01/08/07 - 01/12/07 54% 30% 1.80 -1 1.49% 1430.73 133 S
01/02/07 - 01/05/07 45% 28% 1.61 -1 -0.61% 1409.71 134 S
12/26/06 - 12/29/06 46% 32% 1.44 -1 0.53% 1418.30 137 S
12/18/06 - 12/22/06 69% 14% 4.93 -1 -1.14% 1410.76 147 S
12/11/06 - 12/15/06 58% 18% 3.22 -1 1.22% 1427.09 158 S
12/04/06 - 12/08/06 56% 24% 2.33 -1 0.94% 1409.84 310 S
11/27/06 - 12/01/06 48% 29% 1.66 -1 -0.30% 1396.71 231 S
11/20/06 - 11/24/06 56% 26% 2.15 -1 -0.02% 1400.95 282 S
11/13/06 - 11/17/06 47% 29% 1.62 -1 1.47% 1401.20 184 B
11/06/06 - 11/10/06 37% 40% 0.93 -1 1.22% 1380.90 313 B
10/30/06 - 11/03/06 53% 31% 1.71 -1 -0.95% 1364.30 248 S
10/23/06 - 10/27/06 49% 32% 1.53 -1 0.64% 1377.34 215 S
10/16/06 - 10/20/06 59% 28% 2.11 -1 0.22% 1368.60 89 S
10/10/06 - 10/13/06 43% 45% 0.96 -1 1.19% 1365.62 94 B
10/02/06 - 10/06/06 46% 38% 1.21 -1 1.03% 1349.58 146 B
09/25/06 - 09/29/06 45% 39% 1.15 -1 1.60% 1335.85 120 B
09/18/06 - 09/22/06 44% 32% 1.38 -1 -0.39% 1314.78 255 B
09/11/06 - 09/15/06 25% 54% 0.46 -1 1.61% 1319.87 237 B
09/05/06 - 09/08/06 41% 42% 0.98 -1 -0.92% 1298.92 248 B
08/28/06 - 09/01/06 36% 29% 1.24 -1 1.16% 1311.01 185 B
08/21/06 - 08/25/06 42% 30% 1.40 -1 -0.48% 1296.00 182 S
08/14/06 - 08/18/06 49% 31% 1.58 -1 2.81% 1302.30 286 S
08/07/06 - 08/04/06 54% 22% 2.45 -1 -0.99% 1266.74 267 S
07/31/06 - 08/04/06 51% 25% 2.04 -1 0.06% 1279.36 258 S
07/24/06 - 07/28/06 35% 46% 0.76 -1 3.08% 1278.55 141 B
07/17/06 - 07/21/06 60% 27% 2.22 -1 0.33% 1240.29 247 S
07/10/06 - 07/14/06 56% 24% 2.33 -1 -2.31% 1236.20 267 S
07/03/06 - 07/07/06 66% 15% 4.40 -1 -0.37% 1265.48 287 S
06/26/06 - 06/30/06 54% 23% 2.35 -1 2.07% 1270.20 256 S
06/19/06 - 06/23/06 58% 23% 2.52 -1 -0.56% 1244.50 283 S
06/12/06 - 06/16/06 41% 39% 1.05 -1 -0.06% 1251.54 260 B
06/05/06 - 06/09/06 55% 30% 1.83 -1 -2.79% 1252.30 S
05/30/06 - 06/02/06 66% 18% 3.67 -1 0.63% 1288.22 S
05/22/06 - 05/26/06 40% 43% 0.93 -1 1.04% 1280.16 B
05/15/06 - 05/19/06 46% 36% 1.28 -1 -1.87% 1267.03 S
05/08/06 - 05/12/06 61% 25% 2.44 -1 -2.60% 1291.24 S
05/01/06 - 05/05/06 56% 25% 2.24 -1 1.16% 1325.76 S
04/24/06 - 04/28/06 52% 30% 1.73 -1 -0.05% 1310.61 B
04/17/06 - 04/21/06 48% 31% 1.55 -1 1.72% 1311.28 B
04/10/06 - 04/13/06 54% 30% 1.80 -1 -0.49% 1289.12 B
04/03/06 - 04/07/06 47% 30% 1.57 -1 0.05% 1295.50 B
03/27/06 - 03/31/06 49% 29% 1.69 -1 -0.62% 1294.82 B
03/20/06 - 03/24/06 52% 29% 1.79 -1 -0.33% 1302.95 B
03/13/06 - 03/17/06 41% 39% 1.05 -1 2.02% 1307.25 B
03/06/06 - 03/10/06 52% 25% 2.08 -1 -0.45% 1281.42 S
02/27/06 - 03/03/06 58% 24% 2.42 -1 -0.17% 1287.23 S
02/21/06 - 02/24/06 52% 26% 2.00 -1 0.17% 1289.43 S
02/13/06 - 02/17/06 39% 41% 0.95 -1 1.60% 1287.24 B
02/06/06 - 02/10/06 34% 45% 0.76 -1 0.23% 1266.99 B
01/30/06 - 02/03/06 56% 24% 2.33 -1 -1.53% 1264.03 S
01/23/06 - 01/27/06 40% 41% 0.98 -1 1.76% 1283.72 B
01/17/06 - 01/20/06 54% 27% 2.00 -1 -2.03% 1261.49 S
01/09/06 - 01/13/06 60% 19% 3.16 -1 0.17% 1287.61 S
01/03/06 - 01/06/06 n/a n/a n/a -1 2.98% 1285.45 S
12/27/05 - 12/30/05 60% 20% 3.00 -1 -1.61% 1248.29 S

Edited by Russ, 10 June 2007 - 02:39 PM.

[qqqqtrdr]

Latest data shows the index folks are net short but equity long in the options world, oex index holders tends to be the smart money they say, say any rally here is likely going to be limited here but I am short term bullish.

Index Options
Volume Call Put Total
717,452 1,372,402 2,089,854

Equity Options
Volume Call Put Total
1,088,763 649,997 1,738,760

Russ: I am looking at the OEX index holders and have been watching closely also. My current game if the OEX index holders 10-day Put/Call get back above or close to 1.80, while CBOE Put/Call gets back below .90, that would be enough reason for me to get Bearish. Friday the 10-day average of CBOE went up and 10-day average OEX index holders went down. I consider this a set in the bullish direction. But again one day does not make a trend....


Barry

[Russ]

Interesting Barry, I am not an expert in this type of data but I think diverging negative money flow should give this some follow through.

[OEXCHAOS]

Guys, I'm not going to give the store away, but I'll just say this: The game has changed for sentiment. Different readings are now required. Bottom line, I'm Bearish now. It's very ok to be quick to change, because we are still in a Bull market and a strong one at that, but don't get caught by the sentiment hook. Context is EVERYTHING when it comes to sentiment. More when we publish our work to the Market Analysis area for public consumption. Mark