Sign of Trouble Ahead?
by
, 03-04-2012 at 07:53 AM (2453 Views)
The fund allocation shifts for both the Top 50 and the Total Tracker this week reveal both groups are moving in opposite directions. Nothing over-the-top yet, but definitely something to keep an eye on.
The Top 50 pulled back their collective stock allocations for the second week in a row. Last week it was by 7%. This week they almost matched that by drawing down another 6.88%. They still hold more than a 79% stock allocation, so they're still quite bullish overall.
The herd (Total Tracker) has not had a double digit bullish shift since the week of 17 January (and stocks were higher that week). That week they increased their stock allocation by 11.34%. Since then, they've been quite bearish in spite of the market's advance.
This week, the herd has increased their stock allocation by 16.12%, the largest jump since January of 2011. Total stock allocations are just under 50%, so I don't see this as overly bullish...yet.
But things could get interesting as we get deeper into March. I'm sure the recent pullbacks we've seen has enticed many of us to deploy some capital.
The Seven Sentinels remain in a sell condition, but the stock market has been wavering. We could see another leg higher yet, which may flip the system back to a buy condition should the advance be strong enough. But that's for the market to decide. As I said earlier, sentiment may be shifting to a more bullish posture. Keep in mind that bullish sentiment may need a bit more time to develop in such a strong market before a harder decline might happen.