After a ho-hum Friday morning and early afternoon, one that followed a 200 point Dow rally on Thursday, the market started to go into a panic sell off mode again from about 2:00 to 3:30 pm ET.  By 3:30 the Dow was down nearly 150 points.  Quite depressing to the weaker bulls.  The panic and fear seemed to peak at that point as buying started to kick in.  The market closed the day by moving up almost 90 points in the last half hour leaving the Dow down about 60 points on the day.  Not too bad considering the 200 point gain on Thursday.   Friday's intraday chart...

           

This pullback, sell off, consolidation, dip, whatever you want to call it, has lasted longer than I had expected, but then again it always does.  I've said it before, things always seem the worst at the bottom.  Friday's hour and a half panic sell off is certainly the kind of action you see near a bottom.  After several weeks of light volume these higher volume days are also a good sign.  Volume tends to pick up at turning points. 

I talk a lot about the AAII Investment Sentiment Survey.  I use is as a contrarian indicator.  Last week's bullish percent went from a multi-year low of 13% (very few people thought the market would go up, which is actually a good sign for the market) to 37%.  It means the "dumb money" is a little more bullish than it was which is not usually a great sign, but that 37% is still on the low end.

The "smart money" survey showed 54% of those polled considered themselves bullish, up from 26% the prior week.  This is not a contrarian indicator.  They are not always on the right side of the market but we would be better off being on the same page as the smart money.


                        Charts provided courtesy of www.decisionpoint.com

Oil is not helping much.  It shot up over $1 a barrel on Friday and is now up over $4 a barrel since last Monday. 

That's all for today.  Currently 50% C, 20% S, 30% I fund.  I'm still leaning heavily in the bullish camp for the next few weeks / months.  I know I've said that before but more weakness will do that at this point.  It just brought my indicators deeper into a buy zone.  See you tomorrow.

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