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Investing Ideas_06 14 2010 review

|Includes:AAPL, AMFW, ANF, CTL, GTE, IYJ, MS, Paychex, Inc. (PAYX), SDY, SKS

 It will be an interesting week. The investors’ expectations are very strong. The stock’s prices should rise up.

The AAII (American Association of Individual Investors) Sentiment Survey is currently at 43% bearish–a relatively high level just off a recent peak of more than 50%. All of this has forced us to sit down and assess, or reassess, our level of confidence in the current market. While we cannot guarantee that technical or macro-economic evidence won’t worsen in the weeks and months ahead, and force us to a more defensive allocation, here are the most compelling reasons to still give this bull market the benefit of doubt … for now:

Reason 1: Market breadth is holding up much better than the blue-chip indexes.

Reason 2: Other important bearish divergences also remain notably absent.

Reason 3: Leadership is softening but far from bearish.

Reason 4: Fundamentals do not suggest another recession is on the foreseeable horizon.

Reason 5: Trading sentiment has swung to a gloomy extreme that is characteristically bullish (this is’technical’ but worth understanding).

Dow Jones daily chart:

Stocks: PAYX, AMFW, AAPL, CTL, MS, GTE, ANF, SKS, IYJ, SDY