When Neutral is Bad

By: Stock Barometer | Thu, May 15, 2014
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5/15/2014 5:52:41 AM

Good morning Traders,

Here's a quick update on the markets.

With the AAII poll, they track bulls, bears and neutral. Well, the measure of neutral goes relatively unnoticed, but as we've been pointing out, we're at a historic level of being neutral:

AAII % Neutral Chart

How neutral can the readings go? We've got data going back to 2000 and this is about as neutral as we've seen it. You can access it at www.stockbarometer.com

We're also seeing a relatively low number of people calling for a correction. This just seems to be the nature of this market. The professionals don't know what to do (as evidenced by Tepper's comments this morning) and the individuals are also perplexed as evidenced by both complacency and fear and indifference.

Does that mean that we'll see a correction? I'm leaning that way. The market needs to have a directional move to bring the crowd into one line of thinking before it can have a counter move against the crowd. So until that occurs, it'll be hurry up and wait mode until we start seeing more distinctive price action.

Regards,

 


 

Stock Barometer

Author: Stock Barometer

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/