The Good News Is…

Sentiment…FINALLY…and I mean
FINALLY is becoming more bearish. No, it is not at
an extreme level that can potentially turn a market, a la July lows, but
it is getting there. Bearish advisors are up to 36% while the bulls have dropped
to 40%. It’s a start. Please keep in mind that extreme bearish readings will
turn a market for the near-term. Longer term is another story.

As far as the technicals, not much improvement. The only good news is the longer
the market can hold and the longer the market can successfully retest the lows,
the stronger that low can become…but a break of the lows…and see ya.

I am still playing this close to the vest…very close to the vest. For the
O’Neil-type intermediate trader, this has been a time for patience. You don’t
need me to tell you that. Anything that has broken out, ultimately has failed.
This has to be recognized and has to give pause. There will be a day when things
get better. I will know it because hundreds of stocks will set up in tight
consolidations and one by one, they will break out. This market is not even
close. Patience my friends, patience. Readers of this column have kept all their
principal by just knowing when to sit. We know.

Lastly, I needed to talk about an email I received. It was actually the nastiest
email I have come across. The good news is that I have subsequently talked it
out with this person and everything is now fine. The email basically called me
on the carpet. It ranted about the fact I put down too many people in my
business and that I was an egomaniac for doing it. There were other points the
email made about my talent but hey, everyone gets to decide if I know what I am
doing.

The email was right. On my radio show and in my columns, I go out of my way to
mention people who have led the investing public astray. First off, I do not
enjoy it. I was once told that if you have nothing good to say…don’t say it.
Those are sound words. BUT LET ME BE BLUNT. These
people need to be accounted for. They continue to spew the party line because of
one reason…they have a conflict. That is my belief. The fully invested mutual
fund manager is always bullish. If one would go on the tube and say they were
bearish…they would be fired. CONFLICT. The fully
invested money manager…same thing. CONFLICT. The
market strategist whose livelihood depends on attracting dollars to their
firm…CONFLICT. The list goes on and on. Notice I
didn’t even mention all the criminal acts that are being uncovered on a daily
basis. Have you read about the fines some of these companies are paying?

So, my first reason is that these people need to be accounted for. My second
reason is about you. Yes, you. In the past three years, I have met:

LUCENT retirees that saw their million dollar retirement accounts go to $10,000.

A gentleman that saw his $3 million turn into $250,000. He sees a psychologist
twice a week.

A 65-year-old lady who turned $750k into 65k and was threatening suicide.

A worker at ARIBA that was talked out of his puts on his stock by a broker. His
account went from $9 million to $500,000 before throwing in the towel.

I can only imagine the emotions these people are going through.