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

Published here by the W. B. Busin Group.

June 30, 2009    2200 ET

Was the decline today, the sell signal we wrote about in yesterday's post?   No.  But, it may have been the catalyst for the rise to higher price levels we have expected.

We will see soon.  Care and patience here.

June 29, 2009    2200 ET

A sell signal brewing is likely but from how high in the indexes - new highs or just a retracement.  Which will it be and when?

June 26, 2009    2200 ET

We view the potential downward session tomorrow as a set up for a potential rally.  Just potential, not certainty.  The safer bet is taking the finger off the trading trigger and, wait for a better signal.  The neutral zone allows for much shillyshallying and other market antics.

June 25, 2009    2200 ET

Current daily structure is the question now.  Is it a small pullback to the channel and then run upward next week?

Stock market sentiments are close enough to the bearish zone to allow for an intraday structural run upward and then selloff late in the Friday session and potentially into Monday.

June 24, 2009    2200 ET

It is our view that the corrective is continuing to slog through time by use of volatility that has been accented by the thin volume in the major indexes.

This condition can continue for weeks.  Consider the different "looks" of the SPX and the NDX and the FTSE and the Nikkei and All Ordinaries.  Some indexes are following and may soon become the followed.  Leadership changes are a constant in the stock markets.  The currency pairs and essential commodities, like crude oil, also take their turns in leadership.

Simply stated, corrections can be difficult from one session to the other.  But sentiments are continuously telling us what traders and investors are actually doing.  Right now, we expect the SPX and Dow to act together and the NDX to likely lead in the next upward or downward move.

June 23, 2009  

We expect generally rising stock market and index prices for the next several sessions.  Most technicals support that view, and market sentiments are currently in neutral to support the very short term trend. 

Neutral zone for the stock market sentiment is most often found to be supportive of a current trend, which could be a lateral, upward or downward track.

Technical problems prevented a timely update.  We expect to be back on schedule for today's update.

June 22, 2009   2200 ET  -

In the neutral zone, sentiment can support both a trend or a change of the direction of trend.  If unsure here, then stay out.  If leaning bullish or bearish, then tighten stops.

If your view is that a bullish set up is developing, take small "bites" until traction takes over or fails.  It is a failure we will look for in a bullish scenario.

June 19, 2009   2200 ET  -

Patience is usually rewarded with better opportunity for an entry.  As the bullish have been unable to move price more than a few S&P 500 points while expending energy on thin volume, bullish enthusiasm has reached back toward our bearish zone for market sentiment. 

These sentiments are not based on surveys of trader attitudes or bullish bearish inclinations of some large independent group of traders.  These sentiment indicators are based on one thing - what traders and investors actually do, the positions they take and those changes during each trading session.  That is also why they are the most accurate measures of the emotionally driven actions of men and women who are active in the markets that day. 

This not about what they feel overnight or what they think about some article in the Wall Street Journal.  No.  But it reflecting what they actually did, even if it was partly because of an article in the Wall Street Journal.  Throughout the history of recorded market data, when more or most people are doing the same thing or showing similar behavior, it is usually time to take an opposing position.  That is why the Bearish zone, above 80. is signalling that many traders and investors are taking actual positions in stocks or indexes that are bullish because they are bullish.  To us, that is a time to become bearish, and look for entry into a short position, and/or cash.

We normalized the data to reflect a manageable scale for viewing at a quick glance everyday.  So, we hope it helps you gain or regain a proper view of what the markets are telling you about what people are doing. 

You are welcome to tell friends and fellow traders about our site.  Just post our link or re-tweet our updates.

June 18, 2009   2200 ET  -

When the indexes don't do or go the way you want or see, then it is more likely to do something else, or take much longer.  The risk increases.  The potential reward declines.  So, the trader exits and an investor must decide how long to wait. 

The sentiments may now spend a few sessions in neutral waiting for FOMC next week, while index prices slowly rally or decline into that announcement.  So we wait patiently for the re-cycle of trading factors.

June 17, 2009   2200 ET  -

Our view of technicals, market sentiment, structure, volume, price patterns are aligned for a reversal.  Will the market traders and investors make the most of it?

We will soon see. 

June 16, 2009   2200 ET 

Market sentiment dropped into the bullish zone while price continued lower in the afternoon session.  Structure is likely incomplete to the downward but quite near a low in intraday price.  A strong bounce for stock market sentiment and index prices is likely within days.

Tomorrow is likely an inside day of narrow trading, but also a good entry for an experienced countertrend trader.