2 CHARTS DU JOUR AND THE LATEST AAII SURVEY SENDING OUT CAUTIONARY SIGNALS

The chart below struck me as being potentially pretty ominous. The similarities are pretty eery I think you’ll agree. One thing however that tempers this is the level of put buying in recent months, I get the feel that the market is well hedged for a downdraft.

The Treasury chart also paints an historical picture and I would not bet against a continued rise in yields here, certainly given the employment figs of last Friday.

Finally, the latest AAII survey really caught my eye – the swing into positive sentiment (a contrarian signal) is one of the largest on recent record. For bulls this is a worrying sign, particularly as the S&P 500 makes a meal of getting back about its 50 day SMA. Something worth watching…