Dr. John L. Faessel ON THE MARKET

20-WEEKS OF RESISTANCE PENETRATED BULLISH SENTIMENT ESCALATING (a danger)*... but OVERBOUGHTNESS (MCCLELLAN OSCILLATOR) IN NEUTRAL STILL MORE TO GO... METHINKS SHORT SQUEEZE COULD FIRE Ok, so we have now broke-out through the significant overhead resistance in the major indexes as I predicted and the 50-day and 200-day moving are now behind us (support) and sloping up. Much like in last Monday's study I believe there is more upside based on the sentiment overview (that's escalating, but not at excessive levels) and overbought / oversoldness that's in neutral. Also, discerning overviews of bullish / bearish configurations of leading stocks indicate a still bullish set-up. The reverse head and shoulders “bottom” are still operational. And importantly, "price" looks to be ready to sail through a trading void created by the abrupt downstroke that ripped off 140 S&P 500 SPX points in the first week of May. There is minimal resistance in such fortuitous setups. Key bond market data points like the Ted Spread** and the Barron's Confidence Index*** also continue with "all-clear" readings. The former stiff resistance and now key support in the (SPX) is at 1128 / 1131. Short term trendline support in the S&P 500 (SPX) is 1147. More robust price support is at 1139 then 1124 and 1110. 200-day moving average support in the (SPX) is 1117. The deepest support lows are the July lows at 1011. The next major price (and trendline) resistance at the (SPX) top of 1174. The recovery high (and what will be most important resistance) is at (SPX) 1219.80 was visited on April 23rd. ** The Ted Spread a gauge of bank cash availability that's the difference between what banks (3-month Libor) and the Treasury pay to borrow money for three months bills was at 14.94 basis points today, after reaching of 14 basis points, the lowest tic since April. In early & mid March it dropped to a healthy post of just above 10. But by June 10 it ran up to 48 in the Euro / Greek panic. The Ted Spread 2008's high (the height of the global credit crisis) of 464 points was in October 2008. It averaged 37 basis points in 2006. Key indicators and metrics: · Friday's McClellan Oscillator is at a neutral plus 36 · The Treasury 10-year yield 2.57% · 3-month $ LIBOR slides deeper to 0.289 · CBOE Put / Call Exchange Volume Ratio – 0.84 · (VIX) – 21.71 · Euro - 1.3467 highest since April · Copper - 3.6135 the highest tick since July 2008 CONTRARY INDICATOR & WEEKLY SENTIMENT: BULLISH longer-term investor sentiment readings are moving higher into the BE CAREFULL mode. They are well off their “super” lows (FRIGHT) of the recent couple of months. (High BULLISH readings in the Investor Sentiment Readings usually are signs of Market tops; low ones, market bottoms.) · * The Consensus Index BULLISH investor sentiment survey was rose to 58% BULLISH (20-week highs). The BULLISH sentiment highs of 76% was reached in the first week of May just prior to the huge downstroke. Last week was at 51% The prior 8-weeks were 50%, 41%, 42%, 47%, 51%, 50%, 44%, and 34%. (The low of this market retreat) · The AAII Investor Sentiment Survey BULLISH read was down to 45% from last week's read high of 50.9%. The prior 7-weeks were 43.9%, 30.8, 20.7%, % (the low of the pullback) 30.1%, 39.8% and 30.4%. [The lows registered on March 9th 2009 were an historic low posting of 18.9% only BULLISH.] · The Market Vane (Market Letter Survey) posted a BULLISH read of 53%. The preceding 11-weeks were ― 50%, 48%, 43%, 42%, 46%, 50%, 48%, 50%, 44%, 46% and 39%. (The low of this market retreat) 18 weeks ago it posted the high of the cycle at 53%. · The AAII Investor Survey of BEARISH sentiment ticked up a tad to 25.4% from last week's low of cycle at 24.3%. (The recent down cycle started in early May. The prior 10-weeks were 31.6%, 42.2%, 49.5%. 42.5%, 30.1%, 38.2%, 33.3%, 45%, 37.8% and 57.1% the highest Bearishness of the market retreat. *** The BARRON's Confidence Index slipped a couple of ticks to 74.5 from last week's read of 76.0. The low of the recent market retreat in May had the Index at 72.9 on August 29th. The Index registered new highs of the cycle on June 4th at 79. One year ago it was 67.3. A falling confidence index reflects decreasing confidence in the market. Healthy BARRON's Confidence Index numbers are in the 80's. The Confidence Index is the High-grade bond index divided by the Intermediate grade and is a premier measure of how the bond markets many $ trillions are allocated. The discrepancy between the yields is indicative of investor confidence. There had been a solid improvement in the spread ratio since its all-time low of 45.2 in December 2008, indicating that bond investors are growing more confident and have started opting for more speculative bonds over high-grade bonds. The recent retreat in numbers is definitely a danger alert. Stock of the day: Another heads up on and – just breaking out of a 5-year pattern: 51job, Inc JOBS $38.32 up from $36.01 last week. Incredible chart (weekly and daily) (JOBS) is continuing to move up on skyscrapers of volume. Now a bit extended, so buy on a pull-back. The company provides integrated human resource services to employers and job seekers primarily in the Peoples Republic of China. Market cap $1.06 billion. http://www.51job.com