bull/bear sentiment indicator is hugely bearish meaning a huge rally is imminent.Bears are at 44%- a number which is only seen at market lows.Never seen a big reversal move following that number. This is a contrarian indicator that is about the only market indicator that is accurate.Especially when bull sentiment is above 60%(bearish signal). http://www.schaeffersresearch.com/streetools/market_tools/inv_intel.aspx
This one confirms it too: http://www.marketwatch.com/news/sto...EF19E-AE6F-457B-892D-1E1D7EE88E2A}&dist=msr_4 Let's take a look at the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term stock market timing newsletters tracked by the Hulbert Financial Digest. When I wrote my June 19 column, the HSNSI stood at minus 24.5%. At the close on Monday, June 30, the HSNSI stood at minus 35.9%. To be sure, bullishly-oriented contrarians can find at least some degree of support in the sentiment data. At minus 35.9%, the HSNSI is now lower than it's been any time this decade - lower even than where it stood at the end of the 2000-2002 bear market.
Small caps were outperforming in the last couple weeks. Looks like reversion to the mean. It seems old momentum small-cap favorites are being slaughtered in the small cap space. IMO a good think for the market since there is no more place to hide and money will rotate out of a handful of overheated names.
Clearly some rotation going on, but not sure how you view it as constructive. I personally would much rather see $$ rotating out of large caps and into small as a sign of a healthy market. Throw in sustained inflows to treasuries lately and it looks like big money wants less risk, not more.
If I didn't know any better, I would think that our government is intentionally pushing the dollar as low as they can, destroying the middle class and anything but oil and some export driven companies. Wait, I do know better.
At this juncture IMO the most constructive market action would be to completely destroy the last market outperforming stocks, especially in the small cap area. Annihilate anything that enabled people to hide and keep them from panicking. Let them raise cash and slowly put it to work again.
I don't believe in intuitive trading, but I can't ignore the feeling that a rapid descent is about to unleash its wrath.
only cloud now hanging over the market is possible gm,f,chrysler bankruptcy...also maybe need a spike in the vix to 30 area. Aside from that this market has dropped 2000pts on dow in last 2months.