Coolhand's Market Analysis

Last week, I was looking for weakness given the bullish reading of our sentiment survey as well as negative seasonality, but I wasn't looking for a lot of downside action. We got the weakness and it was limited. This week, our sentiment survey is more bearish (bullish), which makes me inclined to look for some strength now. I had no auto-tracker signals last week and none were triggered for this week either. Here's the charts:




Total stock allocations remained at the same level as last week (96.38%) for the Top 50. I think this is bullish longer term.




Total stock allocations rose by 1.72% to a total stock allocation of 43.53% for the new week. Allocations remain conservative and I view that as generally bullish longer term.



Price closed below the longer term trend line on Friday. MACD had a negative signal line cross earlier last week and RSI, while still positive, is slowly dropping. MACD had a negative signal line cross earlier last week and appears headed lower. I am not too concerned with this chart at this time. Sentiment will probably pull it back up soon.

As I mentioned earlier, our sentiment survey came in at 42% bulls to 45% bears vs. 55% bulls to 38% bears the previous week. That’s a lot less bulls and a few more bears, which I see as bullish for the new trading week. Underlying support remains in place and that should keep some measure of a floor under this market as long as that support remains at high levels.

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