- Sentiment is at an extreme level where we have typically seen a negative risk/reward profile for the market. Sentiment moderated a little with the European scare but there has been very heavy call buying the past 3 days.
- Who does not expect a year end rally at this point?
- Seasonality is less of an issue for the next couple of weeks as we have passed the beginning of the month. As we approach Christmas seasonality will favor the bulls again but for now its neutral.
- Although not a great reading, we are slightly overbought.
The Monday Bounce
Late Friday it looked like we were setting up for what has become a weekly ritual, the Monday Bounce. But those pesky Europeans have thus far put the kibosh on a rally. If we get a typical Monday bounce I will be looking at the short side.