Trader’s Narrative

This morning the numbers for the AAII came out and showed that 50% of the respondants were bearish in their 6 month outlook for stocks.

You have to go back as far as late March 2005 to find a more bearish sentiment outlook! This is interesting, from a contrarian point of view, especially when complimented by the ISE put/call numbers from yesterday. The ISE showed one of the lowest readings in almost 4 years!

So quite quickly, the stubborness of the retail investor which gave me some pause earlier, is crumbling. The tape might liftoff from here; especially the energy, gold and healthcare/biotech sectors. Or we might thrash around a bit more to really confuse everyone (including me).

In the end, I’m sticking to my position that this is a major intermediate bottom and not a bull trap. In the coming days and weeks, we’ll see if I’m right on that interpretation (or not).