make a case for bull

belmonthill

Investor sentiment
The weekly AAII Investor Sentiment Survey (all numbers rounded), issued on 5/19/11, shows

    * 26% bullish
    * 41% bearish
    * -15% more bullish than bearish (now more bearish than bullish)

The bullish reading and the bullish-bearish reading are now both more than one standard deviation below the mean for the data series since 1987.  The last time the bullish-bearish reading was that low was 3/17/11, the day that the $SPX began a 23-day, 7.25% bounce.  The last time that both the bullish and bullish-bearish reading were both that low was 8/26/10.  That was the day before the beginning of a 70-day, 18% bullish run.

The bullish - bearish reading has now been below double digits for five consecutive weeks after having been in double digits for three consecutive weeks.  The bullish-bearish reading has now been below double digits for 10 of the past 13 weeks after having been in double digits for 22 of the 24 previous weeks.  

The drop in the bullish-bearish reading after a long double digit run is similar to what happened at the end of 2004 in a similar stage of a recovery.  At that time the market went into a 10-month, choppy, sideways market before proceeding into the next leg of the bull market.  The market recently has been in a choppy, up and down pattern for at least three months.

slcgh

goldbug

So the market recently will remain in a choppy, up and down pattern until year end when QE3 starts ?

George25