Sentiment With A Bit of Macro

More charts than words here.

We are currently in liquidation mode- and frankly sentiment is bearish and you probably should be bullish. However keep in mind that there is little if any sign of selling capitulation or “extreme” panic. The VIX  may suggest a short-term bottom, but it is not high enough for Volar to be comfortable like last October.

Forgive my “macro” commentary- but the media’s obsession with Europe pisses me off. Nobody is mentioning China- India.

First off here is the OCC data.

The weekly BTO OCC retail ratio is also low.

This tells the story so very well IMO. However this is only 1 of many indicators.

The ISEE also remains low.

Also the RYDEX leveraged asset ratio remains outside of the bollinger band but far from a “major” buy zone if you ask me.

Now in terms of analogs I think this also tells a good story.

Bonds show the same story IMO.

So maybe bonds bottom here, but stocks to me seem to still be in the secular bear market. Sentiment is extreme but I am not sure it shows capitulation- maybe we have that 4th of July rally?

From a market breadth standpoint the summation index has yet to show positive divergence.

Also hard to ignore commods.

And frankly the commods are still following China money supply- which is UTTERLY LOW!!!

All anybody can talk about is Europe but NOBODY is talking about India and China.

Also just look at how commodity imports are slowing and rationing is occurring via miles traveled/fuel efficiency.

Remember that CHINA MATTERS.

India’s GDP growth is lower than 09- CNBC where are ye comments??

And China’s PMI has been way negative for too long to be ignored.

Now 2 other factors to consider.

US household net worth.

And US incomes… ouch.

Also keep in mind that car sales are very important and they are very weak IMO.

Why do I say this is important?

Well look here:

Finally I leave you with Euro Sentiment.

And crowd polls FWIW.

So bottom line. People are generally bearish- especially the Euro. However, many are ignoring the China slowdown.

I am not sure how much this will help you in your day trades, but it should at least put all of the noise going on into perspective.

Best of luck unbiased trading,

-Volar