Another split in sentiment

First off I gotta say, the strength of this market is uncanny but there's underlying weakness because although the markets ended in the green, the advance decline ratio was negative meaning more stocks dropped than rose today. To me this smells of a short squeeze..so I wouldn't give too much bullish credit for today.

I'm noticing another bizzare thing on the sentiment front. Investor's Intelligence sentiment shows 52% bulls and only 20% bears but the American Associatin of Individual Investors sentiment shows only 37% bulls and 49% bears. This is a very wide desprepancy. I noted the same thing occured June 25th and I speculated that the outcome would be a short term rally (1-2 weeks) followed by further downside. We ended up getting exactly that....1 week rally followed by lower lows. I think the same thing could happen this time. I will be very interested to see tommorow morning how the Rydex jokers reacted to this day. These loser traders have been nothing but wrong day in and day out.

I want to touch upon the Kass article for a bit. I think it is critical that you read the opinions of people which are contrary to your point of view. The confirming evidence trap is one that many people fall into which basically means you only seek out information/opinions that agree with your point of view. This is the equivalent of a judge listening only to the plantif's side of the case while completley ignoring the defendant's. There's always 2 sides of the story. I encourage that you listen to people who are against your point of view and try your best not to be prejudice. View the information as if you are 100% in cash. Once you have a position in a stock it can become very difficult to keep your objectivity. Remember the name of the game is to make money...not have loyalty to your stock or a market view. Quite often you may read a point of view that doesn't end up materializing in the stock market. That doesn't mean you should dismiss it. Like I pointed out with Kass, he correctly warned about the housing debacle however nothing materialized untill 2 years later. It would have been very easy to have dismissed Kass' view as rubbish.

I still plan on doing nothing and so far it's been a good strategy...I want nothing to do with whipsaw city. The only thing I hold right now is a modest put position in UUP.