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Bill L.
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Methodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market... More
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  • Friday, January 6, 2012 - Update - Sentiment Snapshot 2 comments
    Jan 6, 2012 3:29 PM | about stocks: SPY, TLT, QQQ, DIA, VXX, FXE, UUP, IWM
    Summary:
    Many of the indications of sentiment are reaching levels that tend to occur near tops.

    Market Sentiment:
    American Association of Individual Investors:

    Notes: Individuals; bears have disappeared.


    Investor's Intelligence:

    Notes: yes, this chart is an eye-sore. News letter writers are getting back on board.



    Put/Call Ratio:

    Notes: Options traders are getting giddy.

    Summary:
    In mid-December I wrote that I thought the market was bottoming and traders should start to test the long side. Now, after a 10% rally it seems everyone else is jumping on board. These are three different segments of the investing community, all of whom are now starting to buy into the de-coupling, America is doing so much better than "X", bullish etc thesis. This is why I focus most of my efforts on simply looking at the market and it's internals rather than listening to everyone else.

    I was stopped out yesterday quickly, but I'm continuing to look at breakdowns as potential shorts, rather than long entries.


    Regards,
    -Bill L.



    Stocks: SPY, TLT, QQQ, DIA, VXX, FXE, UUP, IWM
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  •  
    I noticed that AAII report earlier as well. 17% Bearish reading is a clear cut topping sign in my opinion. I am scaling into shorts here and waiting for the break.
    6 Jan 2012, 03:38 PM Reply Like
  •  
    Bill -
    Glad to see you back! I used to check your blogs every day but you vanished for a while there.

    Thanks for your efforts and the great information!
    6 Jan 2012, 07:08 PM Reply Like
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