Coolhand's Market Analysis

For 10 out of the last 12 weeks now, the Top 50 have maintained a total stock exposure above 91.68%. This week, they're at 100% stock exposure. Might as well stick with what's been working, and being long is working.

Here's the charts:




Stock exposure increased from 94% last week to 100% this week.




The Total Tracker is not nearly as bullish as the Top 50, but they did increase their stock exposure for the fourth week in a row, from 46.43% last week to 50.04% this week. Capitulation isn't coming easy to us, is it?



Looking at the S&P 500, I note that RSI is slowly rising and currently stands at a bullish 64.08. Momentum is positive and rising.

Our sentiment survey for this week came in at 46% bulls vs 43% bears, which I consider largely neutral, but it's a buy signal for the system. Again.

The underlying strength that's been with this market since the beginning of the year has not dissipated, so we're probably in for higher prices unless that changes. I do note that the first part of April 2012 did see some downside action that saw the S&P shed about 60 points before retracing most of that loss by the end of the month. And then the first week of May saw an even larger decline of more than 100 points. To say we're due a correction is an understatement, but I'm not expecting an exact repeat of last year. After hitting a fresh all-time high in the S&P, I'd have to think this bull isn't done. And we could see much higher prices still, although I'd expect to see at least a short term leg down before too much longer. Especially given the intermediate term is negative. But then again, any weakness that has presented itself continues to be bought. That may very well continue to be the case.