Improvements To Report

More ducks are starting to line up for a rally. In the past day we have seen the following positive developments:

• The NAAIM Survey of Manager Sentiment finally showed active advisers turning negative. This was before yesterday's rout so its likely sentiment has become worse. This also comes on the heels of individuals getting as negative as they have been in a year, according to the AAII survey.


• Rydex traders abandoned the long side en masse yesterday. They have been stubbornly bullish this entire time. The only difference between this Summer and last Summer is that last Summer they were aggressively short. They are not aggressively short now.


• The VIX has spiked.


• The market is maximum oversold.


• Italian 10 year bonds are actually higher on the day. They were the original cause for the sell off. Now people can't even remember why they are selling. They just want the pain to stop.