THIS METRONOMIC RALLY—averaging a daily gain of 0.3% since Aug. 31 without even a 2% setback, the cadence conditioning traders to buy every noontime dip for a four-hour lift into the close–has finally lulled enough folks into a state of ease that to be bullish at today's prices and over the very short term is to be in copious, if not entirely trustworthy, company.
The American Association of Individual Investors weekly survey showed the greatest number of bullish respondents since early 2007 and the fewest bears in three years. The Ned Davis "crowd sentiment poll" hit the excessive bullish zone.
The persistent overanticipation of turmoil to come, as gauged by the premium in Volatility Index (VIX) futures, has at last succumbed to the calm market uptrend. New 52-week highs have ebbed, even as the indexes have levitated. And, for the second week in a row, the ratio of corporate insiders' dollar-weighted stock sales to purchases (see "Insider Transactions.") remained at or above the elevated 30 level.
This mix of bullish feeling and smart-money caution comes as we enter a week with three intuitive sell-on-the-news excuses: the midterm elections Tuesday, the Fed's expected detailing of another asset-purchase plan Wednesday and the monthly employment numbers Friday. A look at the news clippings from the lead-up to prior midterm balloting shows far less chatter about how market-friendly this quadrennial ritual would be. (more)
No comments:
Post a Comment