Jeff Saut

Jeff Saut of Raymond James in his weekly comment which should be read

The call for this week: How bullish are “Double Nine-To-One” signals? According to professor David Aronson, as reprised by Mark Hulbert, “[we used] data from the beginning of 1942 through fall of 2006, and looked at what happens in the stock market in the 60-trading-day period following a . . . Double Nine-To-One signal, versus what happens the rest of the time. In those 60-trading-day windows, the S&P 500 index produced an average annualized return of over 22%, on the assumption that an investor entered the market on the close the day after the Double Nine-To-One signal was triggered and held until the end of the 60^th trading day. In the non-signal periods the return averaged 4.5% annualized.” When we combine the “Double Nine-To-One” signal, the 90% Upside Day, the observed downside non-confirmations, the most bearish sentiment readings in 15 years (read: bullishly), and a host of positive finger-to-wallet ratios, we can’t help but remain bullish in the short/intermediate term, thinking the downside retest of the January “lows” will be successful. Yet by far the most stock-bullish event occurring last week was the “dive” in the Commodity Research Bureau’s index of leading commodities as can be seen in the nearby chart from our friends at the invaluable service www.thechartstore.com.