Look At These Sentiment Numbers

  • December 20, 2004
  • Gary Kaltbaum
Near-term, the market is
starting to get a wee bit on the sloppy side. Near-term, I am
seeing some of the bigger cap names put in tops. Near-term, sentiment is off
the charts bullish. For example, the % of bullish advisors is at 62.1%, the
highest figure since 1987…gulp. Put/call figures are waaaaay too bullish.
Lastly, NASDAQ volume is now ahead of NYSE volume…indicating speculation.
None of these numbers occur at a bottom.

 

That all said, the internals remain just fine.
Maybe we see more sloppy action in the near term…maybe not. There are just
too many good-looking charts right now. Until my volume and price indicators
change, corrections aside,  I have to continue to give the market the benefit
of the doubt. Keep in mind, the next 2-3 weeks usually have an upward bias as
the holiday kicks in and fresh money shows up in January.

 

Since I am seeing toppy action in Big-caps, I do
want to repeat support levels…just in case. I do not believe there is a good
chance of them being breached through the holidays though. DOW 11,420…S&P
1173…NASDAQ 2095. If they are taken out, any correction will gain some
teeth. If these levels hold, here are resistance levels. If they are taken
out, we will see another leg up…DOW 10,755…S&P 1208…NASDAQ 2171.

 

A few sector notes:

 

The SEMIS looked like they were ready to go
topside when the announcement was made about expensing options. Many are now
in tight trading ranges. Next big volume day will win.

 

GOLD continues to act toppy. Nothing to do there.

 

OIL prices bottomed in the past few days after a
$15 dump. The stocks are outperforming the commodity…which is usually
bullish.

 

I turned neutral on DRUGS two weeks ago after
being bearish on the technical front for the better part of 4 years. In spite
of Pfizer’s news on Friday, I believe there is a play to the upside in some
names like SGP and GSK.

Gary Kaltbaum