Wednesday, July 14, 2004

In last night's comment I talked about buying Nasdaq futures (or equivalent) if they gapped open below 1421 then rallied above.  Such a trade worked well this morning, but I would be hesitant to try to ride it much further.  The VIX is now 13% below its 10-day average, a decent sign that a short-term top may be near already.  Most of our measures never did reach an oversold status, so I view any long-side trades as very short-term only. 12:03:07 PM

The Inv Intelligence survey came out with only a very slight increase in bears for last week.  The bull ratio (bulls / (bulls + bears)) is still more than 2 standard deviations above its long-term mean, which means that we continue to see an excessive amount of bullishness from this group.  It is NOT encouraging if looking to go long, and a bit disappointing after the sharp increase in bears in the lowrisk survey. 8:35:50 AM