This Is A Test; Please Ignore

It is becoming clearer by the week that the rally that was ignited last August on the heels of QE2 is running out of gas.  If prices did move higher, it is possible that this could be construed as bullish as it does take bulls to make a bull market.  But being so late in the rally, it would seem that any potential gains would be just crumbs to the gains that have already been made. Furthermore, without a sell off to move investors and cash to the sidelines, it is hard to see a rally of any significance developing.  Call me a non-believer, but the market really needs to sell off and investors need to turn bearish (i.e., bull signal) before any real umph returns to this market.

The "Dumb Money" indicator (see figure 1) looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investors Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio.   This indicator is neutral.  

Figure 1. "Dumb Money"/ weekly

Figure 2 is a weekly chart of the SP500 with the InsiderScore "entire market” value in the lower panel.  From the InsiderScore weekly report we summarize: "...market-wide sentiment was still slightly in Sell Bias territory as, excluding Financials, sellers outnumbered buyers 3-to-1."

 

Figure 2. InsiderScore "Entire Market" Value/ weekly