Daily update 5/1 Retail investors all in?

Expected rebound happened all in one day.

Volume decreased considerably today.  The breadth was only +59%.  That is very light for the magnitude of the move.  With the decrease in volume and light breadth I would say money managers that sold yesterday and must stay invested were moving money to big cap stocks.  The new highs barely outpaced new lows 50 to 41.  It looks like a dead cat bounce to me.

Last night I mentioned the futures might want to test the 18 SMA from the bottom.  I thought that might take two days, but they made the entire trip today.  I expect that MA to be pretty stiff resistance on Monday.  Should we get a confirmed break on the upside the bulls would be back in control.  From what I can see that seems like the lower odds scenario. 

The weekly chart has a high volume hanging man bar.  That is certainly suspicious.  It needs downside confirmation to be meaningful.  That would happen with a weekly close below this week's low.  Should that happen we could see significant selling pressure enter the market.

Monday should be interesting.  Now that we have bounced back to resistance will the bears show up again?  Everything I know to look at suggests we have lower prices coming.

Here is a look at the AAII survey of individual investors cash levels.

Only for short periods of time have cash levels been lower then they are now.  To validate that survey I saw this quote today.

A broad look at the 6.5 million customer accounts at TD Ameritrade indicates that retail investors are "pretty fully invested" in stocks, the online brokerage's CEO said Thursday.

Fred Tomczyk cited several signs of this: margin loans at high levels, client cash at low levels and account holders at the firm logging in frequently. "It's usually a good indication that people are very engaged in the markets and watching their investments closely," he said on CNBC's " Squawk Box ."

But Tomczyk acknowledged the potential pitfalls of these trends and what they may portend for stocks. "I wouldn't be surprised if we have a correction here. We've had six [or] 6½ years of up markets here."

To further support the idea of investors being all in take a look at this chart.

This is the ratio of Rydex bear assets plus money market assets to bullish assets.  As you can see this ratio is in the upper teens.  The data goes back to 1998 and the only other time it was this low was in 2000.  Here is the chart from that time period.

The ratio got under .20 a few times that year.  It was a sign of people being all in though.  Here is a look at the 2007 top.

This ratio spent most of that bull market above .50.  It was more then twice as high as what we have now at that top.  Everything points to there being very little "money on the sidelines" left.  I think upside is going to be much harder to come by now.

The market and sector status pages have been updated.  Have a great weekend.

Bob