All of you parents have heard that refrain from the back seat on any trip you have taken, no matter the length, "Are we there yet?" That is about the way we imagine the refrain is coming this morning. As you can see, our Psychology Composite did tip-toe across the threshold, into the P3 zone, but the key word here is still "tip-toe." It has just barely stuck its nose across the line that separates the two zones - P4 and P3. You can see this morning's Asset Allocation Model gauges below.
We don't downplay that change, we just look at many of our Psychology indicators, and some of them are very promising, but the entire toolbox is still showing more dissent than approval of turning more bullish just yet.
One indicator that's not quite where we'd like to see it is the Rydex Ratio, measuring the fickle and usually wrong public trader. You can see below some improvement as their bullish holdings have come down some...but that is not really enough to suit our expectations.
So, hang in there kids. It shouldn't be much longer. We're headed in the right direction, but we need to remain patient.
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