The message board sentiment poll shows Bulls at 41% and Bears at 43%. This is Bearish since these guys tend to be right, at least for a bit. Participation was much better. The Actual Position Poll shows 13% fully long and 50% partially long. 6% are partially short and 16% are fully short. This is again below my 20% threshold and represents a problem for the market, as does the inordinately high number of partially long Bulls. It seems like everyone has an opinion, but nobody has any confidence in it. I don't remember ever seeing so many partially long Bulls. Normally, that would be very bad news for the market, as they love to shake weak hands loose. That said, are those hands weak, or just using good trading discipline? With the volatility, it makes sense to widen your stop and take smaller positions. It's certain that the market loves to punish folks when they get leaning too hard one way or another. My problem is, I don't know if the market will punish these folks by taking out their stops, or by rallying non-stop making them wish they had a full position on. The 5-day Fully Long/Fully Short ratio is just below 100% and that means we can still buy any turn but that we have no actionable signal as yet.
Check out www.traders-talk.com for early updates of the sentiment polls every day.
Our T-4 Turn Indicator went out at 81 which is another signal. We've had a lot signals and lots of "nested signals" and high activity often mark important turns. Typically we want to see readings above 80 or higher before we look for worthwhile turns. This indicator doesn't catch every top and bottom, but it is a great "Heads up!" indicator. I'm thinking that the chop is a marker for a low.
