The most accurate measure of Stock Market Sentiment is the Daily Index Sentiment©

Published here by the W. B. Busin Group.

June 15, 2009   2200 ET  -

We expect the indexes to bounce tomorrow and settle in the middle to upper quadrant of the trading spread for the session.  This should bring price back into the corrective channel and set in a lateral neutral track for both of the market sentiment indicators. 

With upward structure still appearing incomplete, the corrective (lateral/downward) phase is nearly complete.  A few more sessions and then a final move upward is likely to begin.  That is our bias since price has finally penetrated the lower boundary of the channel and is quite oversold.   That channel is likely to eventually appear more like an expanding triangle, as the lows for the corrective set up the final rally toward mid-summer's high.

June 12, 2009   2200 ET  -

We have a larger bias toward price remaining in the channel for a few more sessions.  Stock market sentiment is likely to consolidate in the neutral zone for most of the coming quadruple expiration week.

June 11, 2009   2200 ET  -

We expect another session with a possible new high in at least one of the indexes.  Then a rollover of price are suggested by the divergent directions noted with blue circles on the first graph.   

June 10, 2009   2200 ET  -

The opportunity for an upward breakout of the stock market indexes that persists, is slipping away.  Another strong downward move for market sentiment in the indexes of more than 1 session will have to occur before there is enough room to climb to new highs over the next week or two.

That view doesn't require a crash or down dramatically.  A series of one day spikes of 60+ points downward in sentiment that reverse back upward the next day to near where the spike began, are faux "sells" unless confirmed on the next day.  The trading volumes are thin and concentrated by the retail traders near the opening and 'smart money' or 'big traders' landing with big trades in the late afternoon. 

The intraday channel for structure continues and the stock market sentiment supports the view that traders must be quick and not greedy, while investors should count cash.  This a diabolical traders market. 

June 9, 2009   2200 ET  -

Take a moment and guess about whether the indexes will be up or down tomorrow.  We use Market Sentiments so we don't have to guess blindly.  That is why we use the words 'expect' or 'view' or 'bias' to describe our preparation to enter or exit a position.

So, did you guess up or down?  Will you act on that guess?  Not likely, right?  You will likely apply your trading and risk plan to data, and, (maybe add some sentiment measure), then you will look for your setup won't you.

We view the potential for an upward move as highly likely.  Also, a higher high is likely for SPX, Dow and NDX, at least on an intraday basis.  Look at the structural phasing guess of our green numbers added to the first chart.  Phasing or waves are likely completing or nearly completing the final leg (C) of the first upward bullish move from the March 2009 lows.  (the green 3 is suspect, isn't it)

We expect stock market sentiment to flatten out unless a significant breakout well above SPX 960 develops tomorrow.  Watch momentum tomorrow.

June 8, 2009   2200 ET  -

Repeating the last hour index price rally from all day low range trading, the indexes and sentiments returned to near the overbought levels.  Another flat session could remove some steam from the hot market sentiment tracking near the overbought and toward the neutral trending levels.  We expect that the neutral will only be temporary and that a significant move is near in time.

The significant move could be either upward or downward.  

June 5, 2009   2200 ET  -

The spiking upward and downward reactions to possible improvement of US employment data this morning, was indeed a signal to a flat and choppy session, as we suggested yesterday.

The market sentiments settled at the top of the neutral zone.  The upward potential for sentiments remains available and likely if the top of this final move upward for the indexes is coming next week.

We expect a weak and choppy upward intraday bias for Monday, at this time.

June 4, 2009   2200 ET  -

Reaction to US employment data in the morning may be the key to signalling a flat and choppy session. 

Sentiments settled in the neutral zone for today and could quite easily remain there as USD/crude decide where they will turn.

We don't expect more than a choppy downward bias for tomorrow.

June 3, 2009   2200 ET  -

Stock market sentiment points the way again.  But is it the beginning of a huge crash?  We don't think so.  Is the correction still proceeding toward completion?  That is likely and price should not decline as much as sentiment does. 

Market sentiments are especially sensitive to the emotional uncertainty in the minds of weak traders and investors.

We expect slightly lower prices within a choppy downward track for tomorrow, sending sentiments lower also.

June 2, 2009   2200 ET  -

The markets are behaving as if they might be out of fuel and don't want to look at the fuel gauge.  Very tentative action today.  The market sentiments reflect that also.  Investors and traders are wondering if they may have bought a top again. 

Today's intraday price moves did not eliminate the potential end of the corrective since early May.  As we wrote yesterday, "spell the end of  any possible irregular corrective formation that is still possible", the corrective has not been closed out by a small price rise.

Short?  It may be the bias for tomorrow at least.

June 1, 2009   2200 ET  -

Assume the low on May 21 was the end of an a-b-c corrective.  If so, then the upward move already contains an a-b-c or a 1-2-3, or part of that sequence to begin the last leg - C - of the higher degree A (from the March '09 low).  The sentiments have a wee bit more upside potential and will likely fulfill it. 

Bear market rallies frequently get ahead of a steady upward slope and then wither or move sideways.  Tomorrow's action should spell the end of  any possible irregular corrective formation that is still possible.