Thursday, May 03, 2007

Its all about sentiment

We are back to sentiment arguments again. You know the drill, when everyone is bullish the market goes down and when everyone is bearish the market goes up. Guess where we are now?

On one hand, you have a market being led by the Dow 30, with the small-cap growth stocks lagging for the most part, which has usually been a bearish sign. (Especially for the Canslim investor.) On the other hand, I don't care where you look, everyone is bearish right now. The Fast Money guys, Tom O'Brien, and even the average investor. (AAII investor sentiment was 54% bearish)

If you want to see an intersting chart, check this out.

You can read the full story here. It talks about how sentiment readings show that we are nearer to a bottom than too a top. Amazing.

What to do? I don't know. I guess I'll just keep my strategy of buying pullbacks and not breakouts. My MIND trade is moving in the right direction. My DNA trade is flat. UXG is still strong, while GTW continues to go sideways.

No comments: