Hello wavers,
I've got an important info to share with you today.
According to Investors intelligence advisors sentiment, this week’s data included a new twelve year high for the advisors projecting a correction, along with lower readings for both the bulls and the bears. As things stand, the indexes continue to bet with 2009 highs. Pullbacks last week was brief and followed quickly by new buying. However, I have noted a narrowing of the participation.
The bulls were down slightly to 50.0% after last week’s 50.6% reading, which equaled their September high. Both are still up nicely from the start of November, when a market pullback saw their drop to 44.4%. The advisors continue to show a major sentiment shift from a year ago when the bulls were just 22.2%. That was almost a twenty-year low going back to 15-Nov-88 when the bulls were 21.1%.The bears have left very few. They were just 16.7%, down from 17.6% the previous week and 26.7% the first week of November. That is the least bears since 13-Jun-03 when we counted them at 16.1%.
The long-term bears are at their lowest level in over six years, while the short-term bears (those for a correction) are at their highest level in over twelve years - a very unusual pattern, according to them. The bulls are also well below where they were at the market peak in October 2007. This shows there are not a lot of bulls out there. But there are also many advisors who would like to become bulls if the market pulls back. As the markets often confounds expectations, I could see a year-end rally to new highs that could force the correction camp to capitulate and buy on strength. That, I think, could mark the top.
The difference between the bulls and bears was 33.3%, up just 0.3% from last week and another bearish reading. Remember that last time we had such a large negative difference was in late 2007, just after the all-time high in the DJIA, pushing the spread over 40%.
| Date | DJIA | S&P 500 | Bullish Advisors % | Bearish Advisors % | Correction Advisors % |
| Tue Dec 8, 2009 | 10,390.11 | 1,103.25 | 48.40 | 16.50 | 35.10 |
| Tue Dec 1, 2009 | 10,471.58 | 1,108.86 | 50.00 | 16.70 | 33.30 |
| Tue Nov 24, 2009 | 10,433.71 | 1,105.65 | 50.60 | 17.60 | 31.80 |
| Tue Nov 17, 2009 | 10,437.42 | 1,110.32 | 46.10 | 21.30 | 32.60 |
| Tue Nov 10, 2009 | 10,246.97 | 1,093.01 | 44.40 | 26.70 | 28.90 |
My expectations are for higher prices after completing the "triangle pattern".
My longer term count :
Good trading to all.
