Find the extremes and you will find the turns.
Remember the sentiment measure is at the end of the trading day so the turn will be seen the next day or so.
The S&P has been a strong bullish uptrend so the bullish sentiment seems to only slow the rally where as the strong bearish sentiment seems to find a quick reversal.
Notice that there were only 4 bearish extremes in 3 months and really very few extremely bullish readings in a strong rally!
Notice also the switch in sentiment when support at the black line failed on June 7th, and failed a retest again on the 12th.
It would appear that failure of support really affects sentiment, as it should, but may also signal a short term low, especially when it finds another area of support as it did here around 1490.
No wonder so many get frustrated by what they see as a "failure" of TA.
The real warning sign would be failed support followed by a lack of bearishness!
PS: There was no change in sentiment following Friday's rally.
The "B"s are Bradley dates.
Edited by Rogerdodger, 16 June 2007 - 12:01 PM.