Today’s session did not start off very well and at a few points looked as if the December lows would no longer hold up as support. As if by magic just after 11am buyers began to pick up momentum and eventually a powerful force. Volume slipped on the NASDAQ, but on the NYSE finished higher. The real story of the day was the support kick saving the market. As if by magic the 100 day moving average has been the line of support. Regardless of the why that is we were able to stay above support. If this market is to push higher we need to see upside follow-through. Until then, we will execute our strategy.
The important piece from the market for the bull camp is we did not see follow-through to the downside. Any follow-through to the downside would have kicked started some serious selling. There are were points early in today’s session where it appeared sellers were going to push the market right through December lows. Today’s push off the December lows does shine just a bit a light on the possibility we could see more new highs. Whether or not this will come true we will have to wait and find out.
Once again the crowd has tipped back into the Bull camp. AAII survey turned bullish with bulls ending at 44%. Bears slid from 30% to 22% week over week. While the survey is bullish it is not as bullish as the investment managers making up the NAAIM Exposure index. There wasn’t a single bearish manager in the survey. The exposure index ended the week at 93% long exposure. Anything above 90% is on the extreme end of the bullish spectrum. I’d like to remind readers the index hit above 100% after the fiscal cliff. It did not stop the market from hitting new all-time highs. Yes, the crowd is bullish and it is something we will keep an eye on. However, we are not at extreme levels across the board suggesting frothiness in the market. In the end, price is what matters.
Get out and enjoy this Super Bowl weekend. It should be a great game!
