European markets rebounded overnight along with US futures after Wednesday’s volatile session. Buying began immediately out of the gate pushiung higher until we’d get the high of the day around 10:45am EST. Volume was lower on the day as institutions appeared to be slowing their pace of trading ahead of Friday’s non-farm payroll report. The big percentage move in the markets was nice, but we were lead by the Dow Jones Industrial Average while the Russell 2000 lagged significantly. One day doesn’t make a trend and stock market bulls would like it not to turn into one. Volatility was whacked as fears over a significant move lower subsided a bit. A decent day for the markets but we need further evidence to support a new uptrend is underway.
Given the moves over the past week you would think or at least assume the number of Bears would be jumping into higher territory. We did not see a massive move to the bear camp over the recent week as many are now believers of buying the dip. AAII sentiment survey revealed 36.41% of respondents were bearish for the next 6 months while bulls dropped to 27.9%. Typically, we would see bears jump over 40% after a correction of more than 5% in this quantitative easing market. NAAIM dropped to 50% invested as bearish bets remained even week over week. Bullish bets shrunk week over week. Where we are now with the markets seeing where sentiment is does not surprise us one bit other than we would have thought a few more bears would be lurking.
Tomorrow is our favorite day of any month. I kid and I am being very sarcastic. We’ll follow the price action and we will sit back and enjoy the ping pong action. Have a great weekend.
