FAUX HUNT:

Under normal circumstances the extremes of a few Sentiment Indicators from last week would be calling for a huge oversold rally - however, given the sorry state of the technical and fundamental conditions ( of the markets and global economy, respectively) more time and evidence is needed. Considering that, the best that might be hoped for is a short-covering rally up to previous support-turned-resistance and the 200MA lines.
In addition to the sorry beginning of 2008, mid-month in January is when Pension money ( and whatever bonuses given) enter the market. Anecdotally, in a study I did of option expiry weeks - of the past 32 months only 5 times was the SPX lower on Friday's close than 3 days earlier; however, 2 of the five occurred in the past quarter, and prior to the 32 months, only 1 in 10 had been up, indicating that up and down cycles do exist.
Extremes from last week include the AAII survey with under 20% Bulls and 58% Bears, a recent high; (legal) Insider Selling remains single-digit low with the CEOs buying Finance and selling healthcare (nearly 1/3 of all Sectors' sales).
Bullish per cent is on a huge Buy signal of only 31%, a new low; Specialist shorting is near a record high at 14.6%, with short interest close behind. Money market inflows were $48Billion, the same amount as Dec.7, the day before this last downleg started (wave C of a 5-3-5 corrective downdraft).

Mktsentiment. 1/11/2008 Last Week..... .5Yr.HI...... LOW

DJIA ………. 12606………..12800………..14093..............7286
Nasdaq………. 2439…………2504…………2810.............1114
S&P500…….. 1401…………1411…………1561………..776
CBOE Eq. put/call …78…………..68……………91-8/07…..........46-1/03

VIX ………. 23.6…………23.9…….…….44.. 9/02 bu........10.0-7/05 br
Intrade.com-
Recession% 63……………64nh……………64(bullish)….31(bearish)
All Equities (ETF)
McClel Osc…………-2…………….-23……………91-5/04 br......(81)-5/04bu
McClelSum………-357……………-336…………..1568-6/03.......-917

Newsletter Surveys:
Inv.Intel -Bull:…..…48.8…………52.2………..62.9-12/04br......35-6/06bu
Bear:………… 25.8…………24.5………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……19.6/58.9…….25.7/55.2……..n/a n/a
MarketVane Bulls…48……………55 …………. 74br..............24bu
UBS investor confidence..50 ………44nl -monthly
(monthly change)
IBD: Short Interest- …9.43………10.0nh….……9.86………. 4.0
Public/NYSE Spec.-…14.6………..12.1…………18.25bu……….1.0br
Birinyi Blogger
Bull/Bear Poll ………45/41………45/41
Bullish%- ………31nl………….38……….…88 -2/04br.....36bu
*Insider corporate sellers.8……….7………..97…………..6
Sectors: Most Buyers: Finance,Energy
Most Sellers: Healthcare (30% of all Sectors)

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FAUX HUNT: