Odds Favor Bulls Moderately

We are seeing a decline in bullishness to match the 60 point decline in the S&P 500. We saw a lot of put buying yesterday and the AAII survey is now showing 30% bulls and 41% bears. While Rydex bulls have come down, they are still at lofty levels. We are coming off of a long period of bullishness so it is possible for this bearishness to persist, as investors likely have supply to sell.

This is by no means an easy buy opportunity like the one we saw in the Fall where every indicator was lining up short and intermediate term. We have a few short term indicators lining up for a rally and some strong seasonality starting tomorrow. I remain positioned for a rally over the coming week.

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