From the eBook on Monday
>>some of the sentiment measures are at levels that would indicate over-enthusiasm.
If this is still Bear Market then that would be a problem, i.e. investors getting complacent…e.g. The 10dyma of the OCC option calls% is at its highest level since the bear market began and the VIX just hit a three month low.<<
We can now add to that the overly bullish reading this week from the AAII (public) poll. This showed a big increase in bulls to 48.7%; up from 24% the previous week. That’s the highest percentage bulls since May (just before the market sold off). The net figure (bulls – bears) hit 13.6 and again that’s the highest since May.
As I said in the webcast on Monday it seems like there’s too much optimism so soon after the November low. From a contrarian angle this indicates that fuel for the rally may be running out.
Regarding the Commitments of Traders data released today.
No big change in the SP500 cot data. Smart-money Commercials certainly haven’t become bullish yet
and the Nasdaq100 Commercials are the most bearish they’ve been for 9 months
