Coolhand's Market Analysis

While the charts are looking awful bullish we just aren't embracing this latest up leg. Not that I'm surprised, but that's what the tracker charts show. Here's the charts:




Last week, the Top 50 had increased their collective stock exposure by 7.3%, which was a good move for those that had the guts to chase this market higher. But their total stock allocation last week was still only 23.12%, which is pretty conservative and indicative that this group isn't trusting this market.

This week, the Top 50 sold 1.58% of their stock exposure, which brought their total stock allocation down to an even more conservative 21.54%.




The herd has had more than double the stock exposure of the Top 50 for several weeks now. But they've been steadily reducing their collective stock exposure since the week of September 12th. Here's how they been positioned since that week to present:

Sept. 12 - 54.93%
Sept. 19 - 52.36%
Sept. 26 - 49.60%
Oct. 2 - 47.43%
Oct. 9 - 47.53%
Oct. 16 - 40.83%

Notice the "drop" this week. Total stock allocation fell 6.7%. We've been selling this rally, which shows how little we trust the current rally.

Our sentiment survey was on a sell for last week too, but that was a bust to say the least. All three of our stock funds were up at least 6% for the week. This week our sentiment survey is on a hold (sell) too.

The Seven Sentinels are on a buy and those charts are looking bullish, although we know how quickly this market can turn. I've been saying that there's been plenty of shorting going on this market, which has been the primary driver of upward prices. I believe that's still the case, although towards the end of last week the bearishness was dipping a bit in some pockets. But not nearly enough to think this up leg is over. I'd not be surprised by some volatility at this point however, but the overall trend appears to be up.