There was finally a shift of substance to the bearish side in a least one measure of investor sentiment, the weekly II measure. Bulls fell to 40.9 from 46.2 while Bears rose to the most since Sept ’10 at 33.3 from 23.7. The wide spread between the two in the weeks prior in the face of a sharp selloff was evidence of bulls who didn’t want to throw in the towel and wanted to buy the dip. Today’s data shows finally some white flag waving on the part of the bulls. With this said, bulls are still above bears and to compare, in the panic of late ’08, early ’09, bears got as high as 54.4% and bulls were as low as 22.2%. The German economy is showing signs of buckling as the IFO business confidence figure fell to 108.7 from 112.9, below expectations of 111 and the weakest since June ’10. It still though is above its 10 yr average of 101.5. Greek 2 yr note yields are rising to a record as the issue of collateral backing for any loan to them continues to muck up the entire 2nd bailout. Moody’s downgraded Japan’s credit rating to Aa3 but puts them now in line with S&P’s downgrade in Jan. Japan’s 5 yr CDS is trading at the highest since March. Thailand raised interest rates by 25 bps to 3.5% as expected but hinted that it may be the last for now. In the US, the MBA said purchase apps fell 5.7% to the lowest since 1996 as mortgage rates at 4.39% doesn’t matter if one is worried about work and securing a loan.
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