Yesterday was probably the first day when there was a whiff of fear in the air. We had to break 1250 to get it, and at the end of the day, the Fast Money crew was claiming the price action to be good and talking about a possible double bottom. The Investor's Intelligence sentiment survey has bulls at 46%, bears at 25%, which is not a good sign. For comparison, at the June lows, bulls were at 37% and bears were at 28%. Granted, this doesn't take into account the action over the past couple of days, but it is still too many bulls.
More than that, just watching the traders on TV talk, and on sites like Elite Trader, they are looking to buy the dip. Market usually doesn't oblige the majority, especially when the price action is counter to the sentiment. Expecting a weak close today.
Thursday, August 4, 2011
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3 comments:
HFT bots are ON. The volume in the ES futures at this time is usually around 1000 contracts/min, now we're trading close to 10,000 contracts/min at this time. That's a huge boost to volume. We are now in stressed market trading mode.
AAII has bears at 49.9%
http://www.aaii.com/SentimentSurvey
This downtrend still has a ways to go. 1180 looks to be in play now. Very surprised we gapped down so hard after yesterday's reversal.
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