"JANUS" EFFECT:

Janus is the two-faced god for which January is named; since Jeff Hirsch, scion of the late Yale Hirsch and proprietor of the Stock Traders' Almanac, has announced that the January effect of smaller stocks selling off by funds (only to be bought back later) is coming early this year. He figures mid-December. Maybe this dualism is why we have such a bifurcation in Sentiment signals lately:
Investors' Intelligence survey of 100 advisory letters, reported by Michael Burke's Chartcraft each week, shows an elevated Bullish number of 57.5% and a lowly 22.3% from Bears; on the other hand, the AAII - gleaned from postcards sent out each week, shows a very rare inversion of Bulls/Bears at 40/47, respectively - a Bullish signal.
Public to Specialist shorting has dropped dramatically from 7.26 in Sept. to 4.0 (Bearish), but short interest has declined (down 5.5% on the Nasdaq from October).
The CBOE Equity put/call ratio is at a high level of 61, yet frenetic liquidity has driven the McClellan Summation to recent record high breadth of 1056, the same with the Bullish per cent number at 78 (number of stocks on a Buy signal), a top only superceded once, in 2003.
Likewise, the VIX posted a very rare recent sub-10 number, while the Barron's/ Citicorp Panic/Euphoria master Indicator is still cautiously rising, as is the Rydex Nova/Ursa ratio.
Until these dichotomies are resolved, market direction is uncertain, even with the best time of the calendar year just ahead. Here is the grid of Sentiment Indicators:

Mktsentiment. 12/01/2006......5Yr.HI........ LOW

DJIA 12194...........11577...........7286
Nasdaq 2413............2243............1114
S&P500 1396............1325............776
CBOE Equity put/call 54.............87-5/04........46-1/03

VIX 11.6.........44 9/02........10.3-7/05

ISEE-call/put 121...........299-12/04.......82-4/02
(>200/Bearish)

McClel Osc.(+75/-100) 8...............91-5/04.........(81)-5/04
McClelSum.(+750/-1056nh) 1056...........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:62/28 ..57.5...........62.9-12/04......35-6/06
Bear:43.2/16.1--5yrs 22.3.........38.2-3/03.......16-6/03

AAII-Bull/Bear 40.29/47.5.....n/a n/a
MarketVane Bulls 70......... 73..............24

Barron's Panic/
Euphoric Master Idx -0.52........-0.24 4/06.....-0.75 11/05

Bullish%- 78...............88 -2/04...... 46-8/04