Monday, June 13, 2005


In spite of today's 60 pt.runup in anticipation of ??Flag Day?? (why not), too many Sentiment Indicators are warning of a complacent top nearby: I.I., or Investor's Intelligence Bearish % at 20.9 is a low for '05 while the Bulls hit 50.9 -although it was at 55 and 56 at the mid-March and mid-Feb tops. My cumulative Adv/Dec topped 60k for the first time since that March top.
The VIX is also at a Feb-Mar yawn level just under 12; the McClellan Summation is at a high of 577, not seen since Feb-Mar when it topped out at 707.
The Bullish per cent is at 64; five times it topped at that level in recent months, although it could go somewhat higher. Finally, a new Indicator I am tracking is the IBD short interest ratio now at 5.8 (6.7 was a 5-year high, also a topping sign).
Since 1990, Summer is the only season with a negative return in stocks, (-1%) vs. 2 to 4% rises in the other three, despite Sept. and Oct. performances. While I dislike relying on small sampling like this (15 years), due to all the above data, I would certainly be wary in the near future as Volume continues to dry up.

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