Retail not buying, new share issues at record level, and Insiders are selling at record level

Not only retail investors are not buying, but also insiders are selling at record level. Also, new shares are issued at record level.

We have very low trading volumes because everyone knows the reality of financial and economic condition except those who are hyping markets based on nonsensical debt spending which is creating more future disaster.

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As stock market rallies, insiders sell, TrimTabs warns
Increase in shares outstanding last week was biggest this decade, firm says
http://trend-signals.blogspot.com/2009/05/as-stock-market-rallies-insiders-sell.html

Market Psychology

Market Psychology

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FRACTAL ~We have a fractal traders' psychology pattern today.

May 12, 2009 Traders' Psychology

We have a fractal intraday Traders' psychology pattern.
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Market volume

Monday, March 09, 2009 3:09:30 PM

market volumes are dead.

$COMPX 1273.34 -20.51 -1.59% 1,541,702
$INDU 6562.98 -63.96 -0.97% 1,089,726
$INX 677.93 -5.45 -0.80%

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=36149291

Real market capitulation was in Oct/Nov 2008 and any other high volatility and volume is artificial. Markets are dead as we can see in trading volumes as many are already in cash or in short.

Further downside markets is driven by big hedge funds, traders, and some frightened small investors exiting markets.

negative market sentiment

Negative market sentiment selling off at the noted resistances: SPX 851.85 and Qs 30.65

Until proven otherwise, we have very negative market sentiment and unstable geopolitical issues which I think that markets are discounting the instability.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35337522
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35331941

We have very bearish market sentiment and geopolitical instability which is progressively getting worse. We have a war rumor potentially during Feb - Mar.

Extreme Sentiment as a contrarian indicator

I commented on the extremely negative market sentiment which we are seeing lately due to financial market crisis. The chart below shows almost two decades low sentiment which is now nearly becoming a contrarian indicator.
http://trend-signals.blogspot.com/2009/01/spx-q-and-major-markets.html

The current financial market crisis is mostly due to regulatory failure during the last few decades, especially, during the last few years of ARM/subprime bubble and crash after the late 1990s repeal of the Glass-Steagall act, as example. As noted on the article, C.O.P. is addressing the problem of regulatory failure.

http://trend-signals.blogspot.com/2009/01/better-controlling-wasteful-gov.html

Technicals vs Fundamentals & Sentiment

For VST/ST trades, what you see based on technical readings, but for Longer term trades, fundamentals prevail over technical readings.

It took 3-4 years for fundamentals to prevail over technicals as we have seen the sharp pull-back during 2008.

With all the craziness of market sentiment, even in long term, technicals are working out quite well.



Professionals / Executives are more pessimistic about the economy than their employees:

Professionals / Executives:
60% are pessimistic about the economy now and for the future
31% are pessimistic about the economy now and but optimistic about the future

White-collar employees:
47% are pessimistic about the economy now and for the future
44% are pessimistic about the economy now and but optimistic about the future

Blue-collar employees:
52% are pessimistic about the economy now and for the future
39% are pessimistic about the economy now and but optimistic about the future

Market Commentary - Thursday

With good economic news, markets have rallied today, DOW closed at 12853.09, SPX 1420.33, Qs 47.99, and Nasdaq 2446.80 which are the intraday resistances after the two day rally.

Markets reversed from the pivotal supports and the reversal volumes were quite good.

Even after the two day rally, intraday is not quite overbought because we had volatile swings today.

Markets have unfilled gaps, and will be volatile with earning news.

Live chart links for major markets

We need to see good consolidation without breaking the supports which noted yesterday.

~~~

I noted that we saw the worst first week of New Year performance since 1937 and now we have, "Bears Exceed Bulls by Most in 17 Years, Investor Poll Says" The bearish sentiment is extremely high which is often contrarian indicator. Seeing the extreme bearish sentiment is understandable as we are seeing subprime melt down.

So far, Bernanke has shown good management of the financial market as we see relatively stable market than we could have faced. With his brilliance, markets have survived even though we have a lot of slicing and dicing going on with individual stocks as I noted since Oct 2007, especially, with noting weak breadth.

Bernanke didn't lower interest rate because of high inflation speculation with Gold as we can see that USD is trading lower causing higher oil price. Oil price priced in geopolitical risk premium as well. I noted that markets are trading like schizophrenic because the market sentiment can change so quickly with price volatility.

For this reason, I noted that it would be better to be cautious in 2008. As Bernanke noted today, we could see the Fed making necessary moves to help market condition.

Market Summary

A Countrywide rescue cheers Wall St.

The Dow jumps 118 on news that Bank of America may take over troubled Countrywide Financial. Fed boss Bernanke vows 'substantive' action to help the economy. Delta Air Lines seeks a merger partner. Wal-Mart was a rare winner on holiday sales.
Stocks jumped today on the possibility that Bank of America (BAC, news, msgs) will acquire Countrywide Financial (CFC, news, msgs), the nation's largest mortgage lender and one of the most troubled players in the subprime-mortgage crisis.

The second big rally in as many days also continued on Federal Reserve Chairman Ben Bernanke's promise that the central bank stands ready to move aggressively to help stave off a recession.