posted 9.28 a.m. est
Pre-open Tuesday 29th December
Last week VIX closed at the lowest level since August 2008. AMG reported Equity Fund Inflows of $9 Billion wwhich lifted the 4week flow to the highest net inflow for at least six months. This data indicates that sentiment in the longer term is getting overheated.
On Monday Rydex Bear fund assets declined and Bull fund assets hit an eight week high which lifted my version of the Rydex Assets ratio from 1.62 to 2.75 which is historically high. This means that short term bears as well as long term bears are getting harder to find and therefore rally fuel is starting to run low. A correction could very easily change that and top-up the tanks with bears again but sentiment indicators are getting overheated.
Having said that, the SP500 index spent all of Friday and Monday above the Bear Market 1/2half level of 1121.5. That puts it in a strong position and forces me to favour the idea of more upside despite the warning from the sentiment indicators.
Last week I marked no Significant Buying or Selling on the market profile.
