The dynamic of option investors being bullish at a peak is still in full effect. As I was saying in Everybody is a contrarian indicator!! What is the actual sentiment like?:
I could also drag out a bunch of investor sentiment surveys and they would say materially the same thing. But those are less useful, because they rely on what people say and not what they do. These are measures taken directly from the market, and are a measure of investors actions.
This is why I like looking at trends in the CPCE so much.
1) The April top still looks like (and certainly felt like) a capitulation top
2) the 100 EMA was downtrending ever since March 2009 to April 2010 and since April 2010 it has been uptrending.
This is another reason why I continue to think April marked a major trend change back to down.
And my updated 5 year sentiment chart for good measure:
I also think the NYMO is showing some large divergence (if you consider the recent wave up to be an effective double top with the August highs), much in the same way there was negative divergence on the May bottom to the July bottom.