Our sentiment survey remains on a buy for next week, as does the Seven Sentinels. Bearish sentiment has been a big part of this current advance and I keep looking for clues as to when sentiment may be turning. While our sentiment survey is more bullish than it was last week, we still harbor plenty of bears and this weeks charts "bear" that out.
The Top 50 has certainly jumped into stocks in a big way the past week, with the S fund being the overwhelming fund of choice, but they've been very slow to respond to this upleg since it began on Sep 1st.
The Total Tracker shows a much more modest pick-up in stock allocation, which correlates well with the uptick of bullishness in our sentiment survey, but with less than 45% allocation to stocks that tells me there's still a lot cash sitting on the sidelines outside of TSP. Much of it may not come back into stocks, but if more bears get converted we could still see much higher prices moving forward in the coming months. It's very difficult to gauge what may happen as a result of the upcoming elections, but we need to watch sentiment as we approach that day. A Republican rout in a bearish environment may bring the Fouth of July in November. But how bearish or bullish we are at the beginning of November remains to be seen.
The Top 50 has certainly jumped into stocks in a big way the past week, with the S fund being the overwhelming fund of choice, but they've been very slow to respond to this upleg since it began on Sep 1st.
The Total Tracker shows a much more modest pick-up in stock allocation, which correlates well with the uptick of bullishness in our sentiment survey, but with less than 45% allocation to stocks that tells me there's still a lot cash sitting on the sidelines outside of TSP. Much of it may not come back into stocks, but if more bears get converted we could still see much higher prices moving forward in the coming months. It's very difficult to gauge what may happen as a result of the upcoming elections, but we need to watch sentiment as we approach that day. A Republican rout in a bearish environment may bring the Fouth of July in November. But how bearish or bullish we are at the beginning of November remains to be seen.
