Today bullish sentiment has reached the level last seen in Feb 2007:
Every intermediate term high was made since the bear market began was made on much less bullish sentiment.
While we have received a crash course in not fighting momentum of panic buying public and fund managers and that well remain the way things go, until well … its not.
Along with extreme sentiment, SP500 is also approaching a key retracement level of the bear market and backtest of few key levels:
Besides this 1014 retracement and two trendlines meeting at 1020 (this week), technically (all bias, sentiment aside) there is no reason for SP500 not to test the top of old channel and 50% retracement of the whole bear market ~1120
Yesterday I went way overboard highlighting 4 support levels where dip buyers would be expected to step in, ES futures barely got to the first one when ES got bought up and propelled to new highs end of day.
Here is the hourly chart with what looks like a wedge forming and highlighted levels that are expected to attract some buyers, also some of the levels bears need to break to have a chance to get anything going to the downside:
The longer this goes on the more support is built up and more work bears have to do, if bears can break some levels and cause panic buyer squeze / profit taking stops getting hit it could get really interesting. Untill then will continue scalping intraday setups (updates on intraday levels and itnernals via @esecfutures on Twtitter).
There are some very sobering stories out there in the blogosphere about people getting hurt in this rally, hopefully you are not one of them