2. Sentiment in some areas is reaching extreme levels in bullishness – the Citi Index since I follow it was never that high but also that some real smart guys do capitulate on their shorts is a save sign that a ultimate top is very close.

excerpt 1

A “Confuzzled” Einhorn Compares Melt Up Market To Charlie Sheen, Gives Up On Hedging: Goes Long, Keeps Gold

Submitted by Tyler Durden on 05/02/2011 14:23 -0400

From the just released Greenlight Capital letter: “Much like Charlie Sheen, who seems to believe that all publicity is good publicity, recent market behavior suggests that we are in the part of the cycle where “all news is good news.” This was true for the broad market, which shrugged off the continued escalation of commodity prices, unrest in the Middle East, a catastrophe in Japan, tightening monetary policy outside the United States and a deceleration of domestic economic growth….this quarter we were repeatedly confuzzled when we read company news announcements that we expected to cause falling stock prices, only to see them rise instead – and sometimes sharply at that. Nonetheless, we believe that this environment is cyclical, and that it will continue this way… until it doesn’t. Since we don’t expect to be able to call the turn, we believe our best course is to concentrate on generating better alpha.” In other words, shorting is for wimps. It appears everyone has now given up on hedging. Last time this happened was in the summer of 2008 when nothing could dent the market.

excerpt 2

MONDAY, APRIL 25, 2011 Blank Image
INVESTOR SENTIMENT READINGS
High bullish readings in the Consensus stock index or in the Market Vane stock index usually are signs of Market tops; low ones, market bottoms.
Last Week 2 Weeks Ago. 3 Weeks Ago
Consensus Index
Consensus Bullish Sentiment 68% 64% 69%
Source: Consensus Inc., P.O. Box 520526,Independence, Mo.
Historical data available at (800) 383-1441. editor@consensus-inc.com
AAII Index
Bullish 37.9% 32.2% 42.3%
Bearish 30.7 31.0 31.0
Neutral 31.5 36.8 26.8
Source: American Association of Individual Investors,
625 N. Michigan Ave., Chicago, Ill. 60611 (312) 280-0170.
Market Vane
Bullish Consensus 65% 57% 58%
Source: Market Vane, P.O. Box 90490,
Pasadena, CA 91109 (626) 395-7436.
FC Market Sentiment
Indicator 58.2% 58.2% 57.0%
Source: First Coverage 260 Franklin St., Suite 900
Boston, MA 02110-3112 (617) 303-0180. info@firstcoverage.com
FC Market Sentiment is a proprietary indicator derived from actionable sell-side trade ideas sent by the sell-side to their buy-side clients over the First Coverage platform. Over 1,000 institutional sales people at more than 250 firms participate on the First Coverage platform and have contributed hundreds of thousands of ideas since inception. Each Idea is associated with a ticker or sector and is tagged bullish or bearish by the creator. This data is aggregated at the sector, industry and market level. The FC Market Sentiment score ranges from 0-100 (0=most bearish, 50=neutral, and 100=most bullish) and represents a completely objective, real-time view into what advice the sell-side is providing to their buy-side clients
Citigroup Panic/Euphoria Model

Market Sentiment

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~ by behindthematrix on May 2, 2011.

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