Sentiment in Bizarro World

Stocks were flat to mostly higher again yesterday with the indices enjoying varying levels of success.  The Dow was up 4-points, basically flat, but the broader indices faired slightly better.

For the TSP it was green across the board yesterday.  The C-fund gained 0.23%, the S-fund was up 0.41%, the I-fund added 0.28%, and the F-fund (bonds) gained 0.22%. 

The S&P 500.  What can you say?  This is a major trend with a tight trading channel sitting between the wider channel.  Both are obviously ascending.  At some point the inner trend will break and the outer support areas will be tested but who knows when?  Today?  Next week? Next month?
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The dumb money of the CBOE put/call ratios are actually painting a pretty bullish picture for the short-term.  You'd expect the dumb money to be extremely bullish with the Dow and S&P 500 making new multi-year highs.  And while the dumb money is leaning bullish, they are actually closer to being a little bearish, at least as far as the trend of this indicator goes.
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

On the daily reading you can see that there was a recent spike down under the 1.0 level.  These spikes down have preceded some decent rallies over the next month or so, over the last few years.  This chart looks good for the market. 

The AAII Investor Sentiment Survey shows that the recent minor pullback in stocks put this dumb money bulls to bears ratio back down below 1.25 to 1.  In our TSP Talk Survey System, that would be a buy signal.  This is after the put/call ratio hit an overly bullish ratio of 4.0 to 1 just a few weeks ago so the herd went from very bullish, to nearly bearish is this survey.
 
 
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Our TSP Talk Sentiment Survey came in at 53% bulls, 32% bears for a 1.66 to 1 bulls to bears ratio.  That is a neutral reading and it appears we are getting a little more bullish than we had been over the last couple of weeks - the opposite of what's happening to the dumb money above.  Don't tell me we are becoming the smart money!!

The neutral reading means the system will stay put in the S-fund for next week.  As always, thanks for taking the survey each week!

Thanks for reading!  Have a great weekend!

Tom Crowley