The most recent Investors Intelligence survey has bulls over bears at 43% to 26%. The AAII survey is 45-27 in bulls marking the 11th straight week bulls have a double digit lead, the biggest streak since 2005. But with a relatively light volume market the public has not responded in the way it did back in 1999 and even 2007. Therein lies the rub. It was a year ago I told you in this very space that the public couldn’t be involved to any degree when people from all walks of life were more concerned with applying for jobs at McDonalds. When you are forced to apply for a job you did as a teenager, buying stocks isn’t a priority near the top of your list. At the time I told you the top in the stock market had to be years away. I still feel that way. That doesn’t mean anything concerning the current sentiment or the potential for a violent shake of the trees. In a market like this we are bound to get a move that scares everyone to death. It’s going to happen. It’s not a matter of if, it’s a matter of when and the longer it takes the more intense it will be. That doesn’t mean we go back to a bear market, it just means we likely have a shorter and intense sell off, maybe something like a flash crash. That’s what happens in bull markets.
We look at the seasonal change point and all important Gann Master Timing window coming up this week. We also look to the 161st week time window to the March 2009 bottoms. As you know, we gave you a world exclusive in this space concerning the Gann price and time balance of the 1108 point range in the Dow 1987 crash leg that matched up with the NDX bottom on November 21, 2008 bottom. I just completed my next ‘square out’ Gann article for this magazine which will appear in the not too distant future. I’ve finally uncovered the calculation I believe ties the 1987 top to the March bottom in the SPX. I also think I might have uncovered a relationship from the 09 bottom that dates all the way back to the April 1942 bottom. If that’s true the 2009 bottom may be exponentially more important than anyone realizes. Stay in gear with us and we have excellent intraday thoughts appearing on Twitter: http://twitter.com/jeffgreenblatt.
Click chart to enlarge