Sentiment Gets Bullish, But...

It's just the third weekly sell signal issued from our sentiment survey all year as bulls outnumbered bears 63% to 26% respectively going into the new trading week. You might think we were increasing our stock exposure last week given those numbers, but we didn't. Fact is, both groups dropped their stock exposure. Here's the charts:




This week, the Top 50 dropped their collective stock exposure by 7%, from 66.6% to 59.6% week over week. That's still a somewhat healthy stock exposure though. I would note that last week the Top 50 correctly positioned themselves for a weekly stock gain as they increased their stock exposure by 19.2%. The C and S funds returned 1.00% and 1.47% respectively last week. That's 4 of the last 5 weeks they've re-positioned correctly. Prior to the last few weeks, their accuracy of getting properly re-positioned was no better than about 25%.




The Total Tracker showed a drop in stock exposure of 6.86%, from 52.67% to 45.82% week over week.

So we have a weekly bulls reading of 63%, but the Total Tracker is showing we sold off equity positions to a fairly conservative 45.82% stock exposure. That certainly shows how much actual confidence we have in this market.

 

[TSPNotley]

I have noted that there is a day's time lag from the onset of responses to the noon Friday deadline for changing IFT's. Could this inpart play a roll in the difference of position and poll responses.

 

[MrJohnRoss]

Interesting statistics as always, Jim. Thanks for your research.

 

[coolhand]

I have noted that there is a day's time lag from the onset of responses to the noon Friday deadline for changing IFT's. Could this inpart play a roll in the difference of position and poll responses.

It could be the case last week. The S&P fell back after hitting resistance in Friday's action and that turned many technical indicators down just as it appeared the market may be ready to breakout to the upside (liquidity and perceived positive election bias contribute heavily to this expectation). One could certainly make the case that there is a floor under this market. But that doesn't mean we can't see a scary shot lower over a day or three first. I note that many traders on other boards are heavily short for Monday's action. And that includes me :worried:. It's always a little concerning when traders jump on one side of the boat like that because it could mean the opposite might happen. But some of the more trader savvy sites often see these guys get positioned correctly at reversals too. Next week should be interesting.

 

[Birchtree]

Now this is the kind of news I like - 2012 marks the first time since 1981 that investors have pulled money from U.S. stock funds for more than a year at a time. The signs of disaffection are widespread. And I'm satisfied to be in the arena alone if necessary.

 

[coolhand]

Now this is the kind of news I like - 2012 marks the first time since 1981 that investors have pulled money from U.S. stock funds for more than a year at a time. The signs of disaffection are widespread. And I'm satisfied to be in the arena alone if necessary.

When the market finally blows up, you should be well positioned at ground zero. :laugh:

Seriously, I know what you mean BT . We sure seem to have one heck of a wall of worry.