Figure 1 is a weekly chart of the S&P500, which shows the composite sentiment
indicator in the middle panel. The indicator is constructed from the "Dumb Money" and "Smart
Money" indicators, Rydex asset data, and InsiderScore total market value of
insider buying and selling. These are the set of indicators that I highlight
in our weekly round up on sentiment. 11 unique data points are utilized in
this indicator.
Figure 1. Composite Sentiment Indicator
The indicator is currently neutral. With regards to the specific components,
the "dumb money" indicator is extremely bullish (i.e., bear signal) and so
is the "smart money" indicator. As discussed
last week, this is an odd set up circumstances with little explanation.
Insiders are neutral with a bias towards selling, and there also is a lack
of buying. The Rydex data suggests that we are late in the rally phase.
Disclaimer: Guy M. Lerner is the editor and founder
of The Technical Take blog. His commentary on the financial markets
is based upon information thought to be reliable and is not meant as investment
advice. Under no circumstances does the information in his columns represent
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all positions are fully disclosed at http://thetechnicaltakedotcom.blogspot.com/.
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