Bulls get more giddy and bears go into further hibernation

Stock market bullishness has reached a new high in this run from the March lows as measured by the weekly II survey of newsletter writers. Bulls rose to 51.6 from 48.3 last week and that is the highest since Dec ’07 while Bears fell to 19.8 from 23.1, the lowest since Oct ’07. This contrarian indicator in no way marks an imminent change in direction as the bulls can be right for a period of time as they typically are in bull market moves. The August German IFO business confidence figure rose to the highest since Sept ’08 and was 1.5 points more than consensus but European stocks traded lower after its release as maybe a sign of good data being already discounted. German bunds rallied in spite of the number and US Treasuries are following sending the 10 yr bond yield to the lowest level since July 13th. ABC confidence rose to a 3 month high, up by 1 point on the week. The MBA said refi’s rose to an 11 week high and purchases rose to a 7 week high. July Durable goods and New Home sales data are the key numbers of the day and the US Treasury auctions of 5 yr’s today.

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