Nasdaq continued to crawl higher, a clear sign that the bear may be slowly capitulating, and once most have capitulated, we should see the market top and then reverse. Investor's sentiment is now clearly in topping territory, however, when will it top only time will tell. But for now the market is still going up.
Key Level For Thursday is 2752.
-- Above 2752 implies it is going to continue up, next resistance is 2775.
-- Below 2752 implies it is going into a pullback mode before going back up agai, with support at 2745 and 2735.
From Investor's Intelligence, posted in KWN - Market Topping.
With global stock markets on the move, contrarians are becoming increasingly fearful because bullish stock market readings have recently expanded to the highest levels in more than a year and a half. The following is an extremely important piece because it shows this surge in the bullish readings on the chart below.
Stock market traders and investors should be aware, the bear may be about to come out of hibernation. Here is the latest Investors Intelligence report along with the all-important sentiment chart: “Modest additional index gains occurred last week as the primary indexes continue to trade around their best levels from 2012. They have been unable to follow the smaller-stock averages to all-time record highs.
Indicators remain overall bullish but more charts reached the levels of their prior tops so the short term risk remains high and intact. Those facts are noted by the advisors but only a few reacted with weekly shifts. The end result was ... bulls at lofty levels and showing a wide negative spread from the bears
Now we count almost as much optimism as in Sep and Feb-12. Those two market tops saw the bulls just under 55%, that danger area has almost been achieved again. Those readings suggested at least caution, which is called for again. There could be still more bulls if the quarterly results continue to beat forecasts but some advisors are also adding some caveats to their overall positive outlook.
"The stock market may not sell-off immediately but the likelihood that shares will be lower in 2-3 months time has increased notably. The current spread is up from just 9.5% mid-Nov. Low ‘positive' readings often coincide with correction bottoms while large market declines see more bears than bulls (a negative spread) for even better buying opportunities.”
