Monday, May 1, 2006


Barron's Big Money Poll shows their money managers are anything but Bearish on the market outlook for the year. Last year at this time the Dow 30 was at 10,000. Now, year over year polling show that 57% are Bullish vs. 47% last year (when the Dow was 14% lower), 20% are Very Bullish vs. only 6%, and Bears number only 12% vs. 26% last year - Contrary Opinion anyone?
Although New Highs still outnumber New Lows 2:1, the cumulative A/D breadth is diverging from the upward trend of the DJIA. The McClellan Oscillator, in fact, has dropped from a toppy high of 734 in early February of this year, to a 136 last week, still above the zero line.The Oscillator remains at -2.
Although the Indices and VIX showed benign volatility, some major shifts in the end-of-month trading exhibited profit taking by hedge funds, Consumer Goods and Financials (at least banks) took over leadership from Basic Materials, Energy, and Industrials, at least temporarily.Despite rising rates, global reallocation of currencies has finally weakened the dollar, which is good for gold.
Stock Chart's Bullish Per Cent is just above 64, hanging on the lowest of 3-boxes delineating a downside reversal (3-boxes of 2 pt.boxes, or a 6% "material" stop). Poles apart are the complacent Bulls in the Smith Barney Panic/Euphoric Index and the Rydex Nova/Ursa ratio which at 16 is now as low as in October '05 (10% ago). Somebody's wrong!

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