I’ll probably release the opening segment publicly, but the screenshot gives you an idea of where it is going. NFTRH 267, a damn good and rational market letter… is out now.
Policy, Profits and Propping… that is without a doubt the underlying fundamental support for a massive and growing phase of market speculation that becomes more dangerous with every week that it lurches forward. Once again, the chart that proves this in no uncertain terms:
Dumb money looking pretty smart, eh? Market sentiment is not really a finely tuned timing tool, but the above is representative of a condition that will be in place at the next minor and/or major market top.
Of course this makes great sense since it is the opposite, risk taking behavior, that the Fed seems hell bent on promoting. Right Grandma?
With the exception of the Gold Bugs and to a lesser degree, the biotechs, the stock market is over bullish. It is debatable as to whether the recent semi-extreme readings were bull killers (I am sticking with an eventual cyclical top out in early to mid 2014). But it does appear (especially when factoring in things like the lack of leadership in the BKX-SPX ratio and the S&P 500 at a daily RSI topping point for example) that the market is ripe for a continued short term decline here. Adding to the case (graphics courtesy of the highly recommended Sentimentrader.com)…
The dumb money is brave lately as it appears market players are coming to the exact opposite condition to 2011. Where once there was revulsion toward the US Federal Reserve there is now a robotic obedience to the implications of every word the various media stars utter as they manage perceptions. The herd just goes with it.
Here is the breakdown of various sectors (both graphics courtesy of Sentimentrader.com):