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Strategies & Market Trends : Technical Analysis With Charts

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To: MACD X who wrote (4244)	2/23/2007 8:36:45 PM
From: Bwe	Read Replies (1) of 6865

Mixed signals regarding sentiment according to Investor's Intelligence. II invented the sentiment survey of investment advisors. Here's an excerpt from this week's advisory: The % of bulls fell further to 50.0%, down from 51.1% and achieving a low since 29-Sep-06, when we counted 49.5%. The fact that the advisors have not been impressed by the new highs shown by all three of the Dow Jones Averages [Industrials, Utilities and Transports] has to be seen as a positive. It shows they are not expecting the rally to continue and we contrarians take that as a good sign. Advisors are most often reluctant to avoid a rising market as their subscribers can always go elsewhere for advice. The ongoing scepticism means there is plenty of cash on the sidelines. Markets got off to a sloppy start early this year and that caused a drop in bullishness that is still shown, despite the index rebound and new highs. The bears moved up to 22.2%, advancing by the same amount as the bulls declined. Low bearish readings are not usually a good sign, except when the bulls are also falling. That combination avoids a negative scenario for now. Advisors looking for a correction were unchanged at 27.8%. This group is short term bearish, but longer term bullish. They are looking for market dips as opportunities to buy. Our short term indicators are positive but overbought. The immediate trend of the market is higher. While the recent sentiment changes have been positive the overall sentiment readings must still be viewed as having a negative bias. That is based on the December readings, with high bulls and low bears. Historically, those include bulls at 55%-60% and bears near 20%. That condition held for over two months and the latest drop in the bulls has almost ended the signals, which were early in predicting a market top.

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