Coolhand's Market Analysis

Last week the herd had reined in its stock exposure to the tune of a 39.09%. Rarely does our collective stock exposure fall below 40%. In fact, the last time we were down that low was the week of 20 September 2010 when it was 39.31%.

By comparison, the Top 50 had a total stock allocation of 58.4% last week.

The new week starts out with both groups increasing their stock exposure over last week's levels.

Here's the charts:




Stock positions for the Top 50 were up 21.6% to a total stock allocation of 80%. That's significant, but remember, the tracker was reset for the new year so this group can be quite volatile until more data is compiled.




The herd increased their collective stock exposure by 11.34% to a total allocation of 50.43%. That's not far under the average for total stock allocation. Going back to the first week of June 2010 our average total stock allocation is 52.63%.

I can't use the Top 50 as a guide this early in the year, but given our total stock allocation is back near its average I'd say this market is probably going to be a bit more choppy and not as likely to advance as easily as it has the past few weeks. Our sentiment survey supports that view as well. It came in at 56% bulls and 35% bears. That's a hold from a previous buy signal and suggestive of chop ahead in the near term. But given the Seven Sentinels remain in an intermediate term buy condition my expectation is higher prices in the weeks ahead.