Sentiment Recap

Looking at the weekly sentiment indicators from last week, not much has changed:

• The bull/bear spread in Investor's Intelligence survey widened only slightly to +4 (39% bulls, 34% bears)
• The spread in AAII worsened to -5 (38% bulls, 43% bears); this marks the 8th straight week for more bears than bulls
• The Rydex Nova/Ursa ratio remained low at 9%; the Public Short ratio stayed high at 61%
• The 10-day put/call ratios have come down, but are still at the upper end of their ranges, reflecting lingering bearish sentiment

While the market remains short-term overbought (oscillators/stochastics), I still anticipate another leg higher after this condition is worked off. Today, it is defensive stocks that are faring the best, while growth stocks remain under pressure.