The latest numbers from the American Association of Individual Investors show that bears now once again outnumber bulls. Bulls are now only 32% while bears are 39%. So you can see how quickly mom and pop investor have abandoned their bullishness and yet the market is down only 1% from the last time this survey was taken.
I mentioned a 1 week reading of at least 50%+ has marked previous IT tops...and usually it takes 2 or 3 consecutive readings of 50%+. We only got as high as 44% which occurred last week and this occurred in the face of 6 weeks of gains. In the previous big rallies we've seen, such strong and persistant gains like we've seen this time would have no doubt caused a massive surge in bullishness...but not this time. It shows that people have been burned so many times with these types of rallies that they are not going to be fooled again so they think. This attitude simply reinforces the wall of worry.
Futures are up this morning but I wouldn't be surprised to see any morning strength get faded by the end of the day. But I'm just guessing here. A healthy advance usually starts with a down/flat opening gaining strength through out the day.
I think we could very well see the market set up a bear trap here. If today's pop fails, it going to build the confidence of the bears even more who like I mentioned yesterday were so ecstatic about yesterday's reversal. Then next week perhaps the trap will be sprung. We'll just have to see. As always I'm willing to change my view if evidence suggests so.
No comments:
Post a Comment