Saturday, April 29, 2017

Sentiment Soars!

The percentage of bullish sentiment across multiple surveys of individuals, fund managers and letter writers normally moves at a snail's pace - sometimes changing only 0.5% or 1% at a time. This week, apparently on just the news of round one of the French elections, bullish sentiment has soared by more than five points.

The updated chart is below.

Weekly Bullish Sentiment Soars More Than 5 Points!

A change like this is almost unprecedented in one week. (Note that the 5 point drop off in sentiment from 60.5 to 54.4 occurred over almost six weeks!).

Someone is drinking the Cool-Aid again - within points of an all time high for the S&P 500. We hope it's not you. We also note some real anomalies like extremely low trading volume in a number of instruments - and just want to alert you to it. The chart below, of the ES E-Mini S&P 500 Futures shows this volume decline during April.

ES E-Mini S&P500 Futures Volume Decline in April

And CNBC Reported Friday that SPY volume might come in at the lowest of the year!

So, while there may be a few more up days in this current move, the lack of support by volume combined with the high bullish sentiment, above, may be indicating undue complacency. And, it is again interesting, that after it's new high, the Russell 2000 is again leading the way lower with a difficult day on Friday.

Further telling is a decline in readership and comments across a number of market-related web sites. It seems people usually get interested after the big movements have started, and not before.

Well, that's enough for this weekend. Enjoy the rest of it!


  1. great insight...thanks for sharing!

  2. I admire your analysis. But please provide a less abstract statement of the exact wave position and the expected next target. Reserve all the rights to be uncertain or incorrect. But pleas be much more clear about the tendency you see. Others, even oew that you abjure, do so.

    1. Thanks, but please see the prior day's post. How more specific can a person be to show you an exact target with a box, and a second target in the text?