Street Sentiment Daily Trade Navigator for 8/07/07
Published Tuesday at 9:07 AM
By Mark Young
of Equity Guardian Group
The NEW tthq.com Wall Street Sentiment
board password is xxx.
Overall Intermediate-Term Sentiment:
Individual Investor Sentiment: Neutral-to-Bullish.
Small Speculator Sentiment: Neutral-to-Bullish.
Small Hedge Fund/Manager Sentiment:
Longer-term Trend: Positive.
Intermediate-term Trend: Negative.
Short-term (one-day) Signal: None,
but I'm looking both ways.
We are trading these signals and others (well) intra-day with Premium
subscribers--contact us for details.
Portfolio (tracking portfolio):
50% long DIA at 133.41.
I may go after the TWM if we rally in
order to hedge. I may also double up.
This morning, GLOBEX is off a bit.
The Fed is going to do their thing today and that can bring anything. I
guess is that they hint that they MIGHT cut next go round, but they
won't guarantee it. That might bring more buying or some selling and
probably both. It's anyone's guess. We either have the low for this leg
just behind us or just ahead. Just don't be too Beared up.
Message Board Sentiment
The message board sentiment poll
shows Bulls at 34% and Bears at 40%, which is Bearish, since these guys
tend to be right a bit more often than not. Participation was just
above normal. The Actual Position Poll has 20% fully long and 26%
partially long. 9% are partially short and 22.86% are fully short. This
is above my 20% threshold, and that's somewhat Bullish. This is
interesting sentiment. There are few cautious Bears, but fair number of
stubborn Bears and plenty of Bulls. But then, these guys get positioned
right often at turns. I have to say, this data allows for just about
anything. In a down trend, the Fully Long Bull/Fully Short Bear ratio
needs to be below 60% to give a Buy. We're at 85% but we'll drop off
some larger numbers in the next day or two. It will take just two
fairly low readings to give a buy.
For a larger chart, click the image above.
Check out www.traders-talk.com for early updates of the sentiment polls
Our T-4 Turn Indicator went out Friday at 78 which is just shy
of a signal. We note that some members had trouble accessing the site
too. Could this be a Borderline Buy, maybe? I think that Thursday's
signal was a Sell. I had thought it a repeat Buy, though clearly risky.
Yeah, risky... No matter what, we're being told to look for a turn
around here. Typically we want to see readings above 80 or higher
before we look for worthwhile turns. This indicator doesn't catch every
top and bottom, but it is a great "Heads up!" indicator.
Daily P/C ratio: 1.29. Positive.
10-day P/C ratio: 1.31. Buy.
Equity P/C ratio: 0.84. Neutral.
OEX PC ratio: 1.48. Neutral.
OEX 10-day PC ratio: 1.24. Bullish.
OEX $-weighted* P/C ratio: 1.53. Neutral.
QQQQ $-weighted* P/C ratio: 1.41. Neutral.
ISEE Sentiment Index: 94. Buy.
Relative VIX: Positive.
For a discussion and additional charts of the Relative VIX, click here:
The options data are largely neutral,
which is good news for the market, given the rally. I'm surprised that
the Buy from ISEE after today's rally. That's Bullish too.
The ISEE Sentiment Index indicator is
contrarian; traditionally, over 200 is too optimistic, under 100 is too
General Public Polls
Mark Hulbert's HSNSI fell to 5% and that's a solid drop in
Bullishness. That's a Buy. Lazlo Birinyi reports that his
Blogger Poll has 29% Bulls and 33% Bears on lower participation. Not a
Buy, but also not reliable, I think. The Street.com reported a
drop in Bulls to 26% and a jump in Bears to 52%. This is a good shift,
but there don't seem to be all that many Bears, but there are also less
Bulls than on Sunday. Participation was WAY down. That suggests that
there's one more shoe to fall. Bulls are evading the damage. TSPTalk,
a large site devoted to Thrift Savings Plan management and personal
finance is flashing another Buy with 48% Bulls and 34% Bears. That's a
Buy by their own standards, but I'm not at all comfortable with that. I
say it's actually Bearish. Last week, AAII reported 45.88%
Bulls and 40.00% Bears vs. 44.21% Bulls and 36.84% Bears. This is a
solid increase in Bearishness, but totally expected and not excessive
while the Bulls actually increased. Investors Intelligence reported
that Bulls fell to 47.2% vs. 53.9%, and Bears rose to 26.4% vs. 18.00.
The shifts were solid and now show falling Bullishness--AFTER a major
correction. This is some way from a Buy, still. LowRisk.com
reported that their sentiment poll ended Sunday was 23% Bullish vs. 31%
Bullish last week, and 67% Bearish vs. 40% Bearish the previous week.
This is Bullish.
Our Rydex data shows that non-Dynamic
Bull funds had $16MM (net) outflows on a big reversal. The non-Dynamic
Bear funds saw $2MM of (net) inflows. It looks like the amateurs
dumping and doing a bit of shorting into strength. The Bearishness
on a day like Monday is Bullish. Dynamic Funds saw net Bull fund
sells of $142MM, and Bear fund net buys of $14MM. The Dynamic players
finally got reasonably well on their longs. They had to have been
sweating a bit. I'd view the data as neutral to slightly Bearish. I'd
say that folks are being prudent going into the Fed. The RSO showed an
$81MM Bearish asset shift on a big rally--but it was primarily due to
large Velocity sells. This is neutral, I'd say.
Last time, I said that folks were
beginning to get scared and that such is an early sign of a low, as
it's what gets folks to make uneconomic decisions, which set up great
buying opportunities. That was worth repeating. It's the absolute key
to understanding that what we do isn't just hocus-pocus black box
stuff. This weekend, I had suggested that we'd probably see lower
prices because things like theStreet.com poll weren't showing enough
fear. It turns out, more fear showed up by Monday morning. I had said
the sooner a bounce came, the more suspect it was and that's probably
so, no matter what, but we have to admit that we can get more rally
before we test. The latest sentiment is showing some real pessimism got
built up in some sectors. The Fed does their thing and that's a wild
card. If they don't say that right thing, then we go right back down.
THAT would set up a good low, I'm pretty sure. And then, of course, we
could just rally right on for a while. We just have to be flexible.
Bigger picture, we probably need to bias long for the next few days,
irrespective of a final shot down. As you can see, the rallies can be
killer. Watch breadth for clues of a rally's staying power.
We do not have a ST Sentiment signal. I'm looking both ways. Yesterday,
we took a day trade, snagged a quick and solid profit and then failed
to re-enter, missing a good bit of predicted rally. Since we've been
publishing our ST Sentiment Signals, we've had 52 trades and 39
winners. We're much more active now and I'm offering more set ups when
I'm not going to be around. If you'd like a trial, feel free to contact
The Mechanical Senticator model went long at 144.21. The Subjective
Senticator Model went long 1/2 there too and will add on
weakness. Remember, these models must trade in the direction of
the Senticator or not at all.
Ideal ETF Portfolio (tracking portfolio):
long DIA at 133.41.
may go after the TWM if we rally in order to hedge. I may also double
Past performance is no guarantee of future returns. All
information included in this missive is derived from sources we believe
to be reliable, but no guarantee can be made to that effect. None of
the forgoing should be construed as an offer or solicitation to buy or
sell any security. The publisher may have a long or short position in
the funds or securities discussed at any given time. We aren't your
advisor, unless you have a signed contract with us. Please review any
trade that you do with your trusted advisor FIRST.
that we are also publishing on our private area on Traders-talk.com,
too, for those who want on-line access to our charts and research and
may be away from email. Password is at the top of this letter.
(you'll need to register and sign in on Traders-talk and you'll need an
additional password to access the board. If you are a subscriber and
you do not have a password, please contact us).
For more on using the WSS and the various sentiment poll data, click
Mark Young, Editor