Investor Angst Still High

The market closed fairly flat, but tomorrow morning's outlook doesn't look so good after a disappointing round of earnings reports tonight. AAPL beat estimates, but offered conservative guidance. And there is the issue of Steve Jobs' health and why he wasn't on the call?

Amex (AXP) reported terrible numbers, which will spark renewed worries about the consumer. And Texas Instruments (TXN) and SanDisk (SNDK) both reported weak results which will weigh on semis tomorrow.

Taking a look at the investor sentiment indicators, I think this rally still has some room on the upside, as the indicators still could use a bit of unwinding from highly pessimistic levels. Here is a quick rundown:

• The Investor's Intelligence bears have outnumbered bulls for 5 straight weeks; moreover, the % of bears hit their highest level since 1995 (pretty amazing)
• Bears on the AAII survey have outnumbered bulls for 6 straight weeks
• Bears on the Ticker Sense blogger survey outnumbered bulls for 10 straight weeks; this is the longest such streak since this poll's inception (roughly 2 years ago)
• The bulls on Market Vane are down to 33%; this is the lowest level since the last bear market
• The 10-day CBOE put/call ratio hit 1.10, a high level
• The 10-day ISE call/put is also low at 103
• These put/call ratios are not as extreme as they were in March, but they are back to levels from last November that led to a lukewarm rally

Tomorrow you will likely hear a lot of folks talking about the recent lows being retested in short order, but I maintain that I think there is still a little room left on the upside before such talk is worth heeding.

long AAPL