Monday, April 11, 2005


At least part of recent market softness has to be due to last minute Income tax funding before the Friday deadline. Despite the many previously mentioned reasons for another selloff, many of the Sentiment Indicators are lining up for a decent rally in the near future. Usually, when I decide to take a vacation before my summer class starts, the market rallies bigtime - like Jesse Livermore did when the market sagged (take a cruise), that is what I plan to do next week, so the column will be a little disjointed, timewise.The Indicators that are currently on or near a Buy point are: the CBOE put/call ratio at 64, although the ISE one jumped up on last Friday's action. The VIX quieted down to 12.6; newsletter surveys are giving a huge Buy signal with I.I.'s Bull/Bear harkening back to last Aug. numbers, below 50% vs. 29.2 Bears; recent Consensus,Inc.'s 35% and AAII's 27.7 vs. 43.9 (inverted, yet) also are extreme. Plenty of cash still abounds, the public is outshorting the Specialists increasingly at 2.26 to 1, and the DJIA dividend rate is at a new high 4.7%.
I would still like to see the Bullish percent fall to about 50% of stocks on a Buy signal (now at midrange 65) and the Nova to Ursa Rydex ratio into the teens from its current 24.

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