Monday, June 19, 2006


A number of stock market buy signals suggest you should put as much into the stock market as you can as quickly as you can.

The following is a quote from Sentiment Trader "The 4-week average of the American Association of Independent Investors ratio is now effectively at its most extreme level, a point that has equated to major market buy points in the past. The 3 month average return over the past 20 ears has been 7.1% with 95% of the weeks being positive (62 out of 65)".

The Sentiment Traderweb site shows other indicators that are not screaming "BUY" but several of my favorite indicators are strongly in the BUY camp. Right now, smart money confidence is up to 67% and dumb money confidence is down to 29%! Also the Rydex ratio is at about the same level it reached in March of 2003.

The above indicators are just a small piece of the investment puzzle. They mean little by themselves. However, valuations suggest that stocks are cheap relative to bonds and real estate. In the past, when Sentiment was as negative as indicated above and when valuations were this positive, there were some great moves ahead in the markets.

By the way, Marilyn, Courtney, Whitney, Julianna and I are enjoying the beauty of Myrtle Beach. We still have a few empty spots this summer. Please let us know if you would like to visit Myrtle. Happy Monday to All!