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

Published here by the W. B. Busin Group.

May 29, 2009   2200 ET  - 

Five 15-minute bars have accounted for 34 of the 40 SPX points from Tuesday morning's low opening.  Three bars at Tuesday's opening and the last two bars at Friday's closing.  The 1555 ET 5-minute bar on Friday reminds us of the 1980's and 1990's, except that the volume then was in the futures.  Now it is in the ETF's.

Can price slog higher?  Yes.  We don't expect another spike upward but we do expect more lateral corrective unless price breaks out to new highs, and holds there.

Can price tumble downward?  Yes.  The SPX is at the upper channel/triangle boundary. 

Sentiments are in the bearish zone, and volume is still feeble.  These two alone point to a sell.

Let price action recommend an appropriate position.  Wise and patient traders and investors don't have to take every trade.

May 28, 2009   2200 ET  - 

Assuming the corrective is not complete, the next move is likely a pullback toward a rising lower trendline or further to the tested support level of SPX 880.   Assuming the corrective is complete is difficult without a clear breakout to the upside. 

For us, we remain patient in cash for clarity.  An upward breakout from these levels may have to take out previous highs to "prove" completion of the 4th phase.  SPX 950+ remains the target for this leg.

May 27, 2009   2200 ET  - 

The lateral corrective that began in early May is still incomplete.  In a correction of this type (channel or contracting triangle) market sentiments can move in either direction within the neutral zone.  Staying in cash and waiting for the consolidation to end is the best risk to reward play.

May 26, 2009   2200 ET  - 

With SPX and Dow attempting to re-enter the upward channel, an upward spike in the first hour was tempered by the low volume.  Low volume is often seen in the lateral correctives as we view this as still within the 4th phase of the current move from the March lows.

So, what is next?  We don't expect a breakout just yet toward SPX 950+.  But a move could upward in the stock market sentiments tomorrow could signal a small pullback to test the channel, and then begin a more extended and powerful move upward early next month.

May 22, 2009   2200 ET  - 

The afternoon selloff pushed our market sentiments lower into the neutral zone.  The action on Tuesday is likely to be similar to today's lateral trading but the closing hour may offer a better indication of what direction the rest of the week will hold.  The strong potential for narrow high-low price spread and low volume is what we view as the most likely resolution.

A lateral movement may allow sentiments to decline near or into the bullish zone without testing support levels set in by recent lows.

May 21, 2009   2200 ET  - 

The downward move in the indexes appears incomplete and will likely track a countertrend upward move on Friday.  Market sentiments don't indicate completion of the corrective.  The SPX 890 level has held at SPX 888 on closing at a maximum low closing. 

Tomorrow's morning session will likely set the upper level of the trading spread for the day and then slowly drag the indexes back and forth into the closing.  We expect a higher closing tomorrow into the long holiday weekend in the U.S.

Monday is a market holiday, Memorial Day, in remembrance of America's war veterans and their service to the cause of freedom and liberty. 

We will update charts on Friday but none on Monday.

May 20, 2009   2200 ET  - 

The setup for a short appears available.  Although structure appears to need another intraday upward leg, the resolution looks to be lower.

Whether the move becomes a larger correction depends on whether SPX 890 breaks on a closing on or before Friday's closing.  If not, the potential for further upward above the long term down trendline is the probable move in coming weeks.

May 19, 2009   2200 ET  - 

Stock market sentiments have placed the sell short option back on the table.  If other technicals, structure, etc. align for tomorrow, the potential 'sell' may be the side to consider

May 18, 2009   2200 ET  - 

The corrective continues and is likely to chop only modestly higher in price.  If price indeed breaks to new highs and holds through a closing, structural arguments will have to be resolved. 

Sentiments often remain in the neutral zone, avoiding outright sell or buy signal settings, especially during flat formations corrections, as volume patterns vacillate between weak and strong.