Sentiment Overview

1. Interesting Timing on this headline and post - could be downright prescient as a contrary indicator

LA Times Blog - 'Buy the dips': The Wall Street cliche that has worked like a charm

November 18, 2009 |  6:00 am

2. Barron’s Big Money Poll which found that the most bullish positions also highly correlate to the highest net speculative futures positions:

Below chart highlights the latest Barron’s consensus on the various asset classes — percent bullish and bearish. As expected 60% are bullish and only 13% bearish on equities.

 Amazing!

Short Term Sentiment Extreme

This level of optimism has usually marked short term tops in the past.  Looking for a correction and a final spike higher.

SPX:1093.77

Investors Business Daily Sentiment - Bearish

Another respectable indicator moves over to the dark side.

Investors Business Daily’s Big Picture market tracker has been a remarkably prescient indicator over the course of the last year.  Following this indicator kept investors out of the major losses last year and got you back in the market early enough to capture the majority of the gains off the March bottom. 
They’ve been bullish throughout the massive rally and just changed their outlook to negative for the first time since the rally began.   They note the high volume of the recent sell-off, loss of leadership, and high number of distribution days as the reasons for their move to a bearish stance. They now recommend avoiding new stock purchases altogether until the market begins to exhibit some signs of strength

 Source: PragCap

Love 'Em At the Highs, Hate 'Em At the Lows

These were my thoughts from last week.  The tells were in the Transports, the Semiconductor index, and eventually Financials started leading the market lower.  Tech was the last to break down and the market tanked only after the 4 horsement were shot down (google, apple, goldman, ibm).

Short the SMH $26.07, Short the Russell IWM $62.35