"The Specialist Short Ratio for the week ending April 22nd (the latest available) was the 2nd-lowest in history. The lowest in history occurred only the week prior. One week of this data reporting that the “smart money” had all but abandoned their shorting activity can be explained away – two consecutive weeks of the lowest readings in history start to become suspicious. With a couple of new SEC regulations taking effect recently, one can’t help but wonder if this measure is being more misleading than usual. If it is, indeed, an accurate reflection of excessive public shorting, then we are seeing the most bullish data in 60+ years of history."

So the "smart money" is shorting the market (betting it will go down) at a rate lower than any other time recorded and the "less sophisticated money" is going the other way by shorting the market near all time high levels.  So who do you want to follow,   Specialists or Joe Sixpack?  Many people still do not trust this recent rally.  It's this concern by the herd that should keep the market climbing that proverbial wall of worry. 

So far the market has held up well under the recent short term overbought condition.  It is actually back to neutral after the digestion we've had the last few days.  All very good signs that we may soon see another leg up.

The dollar is continuing to show strength but it has again bumped up against resistance.  A break above yesterday's high would be another step in confirming the bottoming formation in this index, although I'm sure it won't  go straight up.  Looking out longer term however, I think the dollar is showing that the worst may be over.    That means the I fund could see some resistance over the next several months.  It doesn't necessarily mean it will go down, but it could face a tougher challenge than the U.S. funds.  I have been saying this for months but these freight trains take time to change direction.  Remember how negative everyone was (even the experts) earlier this year on the dollar?  Again, everything always seems the worst when a bottom is near.


                          Chart provided courtesy of www.decisionpoint.com

That's all for today.  I will be going out of town again tonight so you may not get an updated market comment update until Thursday or Friday morning.  OK, ok, keep down the applause.  You're off the hook for a few days.  Probably for the best.  The more I try to analyze this market, the more apt I am to do the wrong thing.  Let's enjoy the ride.

Currently 65% C, 20% S, 15% I fund.  Until next time...