Time to dust off the bear claws when these sentiment experts are sounding warnings on stock markets, and on 2010

The good folks at SentimenTrader.com make it their business to track sentiment signals for stock market traders. That's why we should pay attention when they start sounding alerts. And here are two noteworthy entries by Jason Goepfert at their blog. I should remind readers that we don't believe the rally top has been completed yet. But it can be just a couple of days away, and may top out real soon at or just above SPX 1150. So take a look at these (and bookmark their site so you can keep up with their public comments from time to time): Individual Investor Sentiment - A Picture's Worth... | Sentiment's Edge, http://sentimentrader.blogspot.com/2009/12/individual-investor-sentiment-picture.html

Individual Investor Sentiment - A Picture's Worth...

12/31/2009 08:04:00 AM Posted by Jason Goepfert

The chart speaks for itself.

And here's another interesting entry at that blog. Again remember, this isn't to say the high just finished, but a reminder of the context and why we're expecting the next drop (once the SPX loses key support like 1126, and then 1114) to be a significant one within a difficult year. We still want to respect out strategic plan to buy in March for more tops in May and/or August, but after that a sharp decline may turn the full year negative or at least disappointing:

Years Ending In "0"...A Bad Omen? | Sentiment's Edge, http://sentimentrader.blogspot.com/2009/12/years-ending-in-bad-omen.html

Years Ending In "0"...A Bad Omen?

12/30/2009 10:22:00 AM Posted by Jason Goepfert

There are an endless number of factors upon which to rely to make a market forecast; politics, economic cycles, fundamental ebbs and flows are all fair game, and we're seeing an abundance of them now as the year winds down.

Let's touch on one seasonal cycle that has displayed a curiously consistent pattern over the years. There are many others, such as the four-year cycle, the midterm Presidential election cycle, etc., but for now let's just look at "0" years.

The table above shows how the S&P 500 has performed in years of the decade using monthly closes since 1928. Overall, "0" years have been pretty weak - less than half of them have closed in positive territory. The average maximum loss during the year was -14.3%, nearly double the average maximum gain of +8.7%. Only years ending in "2" have fared worse (just barely).

In a Research Report to subscribers, we broke down the years by quarter, with some interesting findings (e.g. it's never paid to short during the fourth quarter of years ending in "5" or "6"...so, you know, keep that in mind in October 2015).