What Sentiment Says About the Market

05/10/2013 8:00 am EST

Focus: STOCKS

A lot of traders and investors alike have distrusted the stock market's relentless advance, but it appears that is now coming to an end, notes Gary Tanashian of BiiWii.com.

Something just did not square as the S&P 500 came to the long-standing target range of 1550-1590. That was the tendency of the 'dumb' money to jerk bearish every time the market took a 1% or 2% dump.

Enter bubble dynamics at the behest of an aggressive and out of control Federal Reserve.

To put it in non-technical terms, here is how one might interpret the mind of the Fed, if only the Fed's members were a) honest enough or b) able to clear the dull haze of bureaucratic myopia in order to see what they are actually doing….

“Get your ass up there you pig. We know that our only way out of this is to inflate an asset bubble, making the rich ever richer and the poor more disenfranchised and dependent upon the system. We are playing with printed and keystroked [funny] munny after all and so far that munny is doing exactly as we wish in trying to indicate a wealth effect in the stock market.”

Well finally, the public is buying it and upside blow off dynamics can now be anticipated.

 

chart
Courtesy of Sentimentrader.com

Click to Enlarge

 

We have been following this and other market sentiment data every week and now the dots are finally starting to flee the middle (neutral) ground they have held for too long now. Finally, people are getting too bullish a market that is too far above certain moving averages and making readily definable patterns that provide measured targets.

I do believe big changes could be coming in May or June for our dear FrankenMarket.

By Gary Tanashian of BiiWii.com

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