Sentiment Update

Despite last week's outsized rally in the markets, and the notion that the market looks to have put in a fairly solid bottom, investor sentiment remains highly skeptical.

Here are a few examples:

• The Investor's Intelligence survey showed more bulls than bears for the 4th consecutive week; a rare occurrence
• The AAII survey also showed more bears than bulls, for the 15th out of the last 16 weeks
• The 10-day CBOE put/call ratio is still above the 1.0 level
• Short interest on the NYSE rose 0.8% last week, to a new all-time high

So the market looks like it is climbing the proverbial 'wall of worry'. The volatility index (VIX) has now fallen below its 200-day moving average, a good sign. Also, the Yen looks like it has topped for a while. And despite the market coming into the week at very overbought levels, there has been consistent buying today.

On the negative side of the ledger is the fact that oil is testing all-time highs above $109, and gas prices are on the rise also. This has negative implications for consumer sentiment, as well as being an impedence for the economy.

Let's see if the market can hold on to its gains into the close, which would further frustrate the bears.