COGNITIVE DISSONANCE:

The above is defined as the frustration of accepting new facts that disagree with the current comfortable belief, sometimes known as Contrary Opinion. In Barron's recent Other Voices, Kevin Duffy writes about some disturbing facts on today's market:
- Strategists at the 12 major firms are in unanimous agreement for higher stocks, the first time since 2000.
- Money market balances are at all-time low (21%) of assets; the ICI reports only 3.7% cash in Equity Funds, below the 3.9% record in 1972.
- Assets in Bear funds and short ETFs vs all Mutual Funds are 1 to 1,000.
- The Finance Sector is 22% of the S&P 500 and corporate profits from financial activity is double that number.
On the other hand, Goldman Sachs reports that 18 of the S&P 500 stocks are in merger/buyout mode with $23B (almost all cash) deals at risk in Supply.
Some Sentiment extremes this week include the Bearish ISEE indicator at 173; I.I. survey complacent at 56.7 Bulls to only 21.1 Bears, although the AAII inverted to cautious.
Corporate Insider Selling dropped from a high 97:1 last week to only 24:1, with Tech sellers 320:1.
Here are the numbers:
Mktsentiment. 6/15/2007......5Yr.HI........ LOW

DJIA ………. 13639...........13668...........7286
Nasdaq………. 2627nh............2627.............1114
S&P500…….. 1533............1536............776
CBOE Equity put/call 58............87-5/04........46-1/03

VIX ………. 13.9..........44 9/02........10.0-7/05

ISEE-call/put ……. 173...........299-12/04.......58 - 3/9/07
(>200/Bearish)

McClel Osc……………13...............91-5/04.........(81)-5/04
McClelSum…………… 289..........1568-6/03.......(726)-5/04

Newsletter Surveys:
Inv.Intel -Bull:…..…. ..56.7...........62.9-12/04......35-6/06
Bear:………… 21.1 .........38.2-3/03.......16-6/03

AAII-Bull/Bear ………37.3/43.7....n/a n/a
MarketVane Bulls…. 66......... 74..............24
IBD: Short Interest- ….7.58……7.66………. 4.0
Public/NYSE Spec.-…. 7.26………13.15……….1.0
Birinyi Blogger
Bull/Bear Poll …………50/23.3
Bullish%- ……….…76...............88 -2/04...... 46-8/04
SentimentTrader
Short/longtermBULL/BEAR. N(neutral)/N

*Insider corporate sellers 24:1
Sectors: Most Buyers: Healthcare, Energy (10:1)
Most Sellers: Tech (320:1)

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COGNITIVE DISSONANCE: