Bullish sentiment on SPX stands at 94%.
This is an extreme reading in the last 4 years.
Only 2% bulls remained on the SPX in March 2009.
So there were 98% bears on SPX in March 2009.
Majority of the crowd expected the SPX to decline further but as we have seen - the SPX surged higher in the opposite direction.
This caught the crowd off-guard.
So we have seen a dramatic reversal from bearish to bullish sentiment in SPX since March 2009 low.
Also note that - mutual fund mangers' cash/assets ratio is at 3.6%.
This is a major low if not the most extreme.
So they are positioned heavily bullish.
The market may surprise them on the downside like it did in March 2009.
As I mentioned last time , the TRIN ratio was at a multi year low.
Low TRIN indicates more volume chasing UP stocks.
So it can be an indicator of market momentum.
We all know momentum chasers end up in tears.
Many other momentum indicators are reaching record extreme readings all at the same time.
This may be viewed as bearish.
We are seeing sentiment readings reach an extreme level of bullishness and momentum indicators showing the rally losing steam.
This is not a bullish market as per the data.
Decreasing volume and breadth are not the signs of a coming bull market.
TICK is one more indicator that is worth looking at.
It notes the net number of stocks up Vs down all during the trading day.
In a real bull market both TRIN and TICK should be strong.
We are seeing now that they are diverging.
This is clearly bearish.
This year Gold and Silver have shown extreme sentiment readings.
It does not look and feel like we are at the start of a bull market in either Gold or Silver.
There is more downside risk Vs upside reward from here.
The one asset class no one wants to go long today is CASH.
It would seem wise to stay in CASH or in DOLLARS.
This is a medium term market call.
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