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There's just no making sense of this stock market

Investors can't make up their minds whether the grass is green and the sky is blue, or the
grass is blue and the sky is green.

If one theme has been consistent in 20!, it's that there has been no consistency. "ust a
week or two ago everyone seemed convinced that the big correction finally had arrived, and
now everyone seems to believe that a little market blip simply has come and gone.

#o is this the sign of a good market$ % bad market$ % normal market$ %n abnormal market$

&es.

'(ead more) *ass thinks #+, should fall -., but is he right$ /

01e're going to have this frustratingly volatile but flat year,'' "im ,aulsen, chief market
strategist at 1ells 2apital 3anagement, said in an interview. 0&ou have this big year, and
then you've got to spend some time to re4establish a base to take off from. That in its own
right creates some volatility. #ome of that's already happening.0

Indeed, the stock market is trying to find a concrete direction after a standout 205 during
which the only path seemed to be vertical.

1ith investors e6pecting the momentum to continue, "anuary, on cue, turned in its worst
performance in years. That triggered a sharp pullback of cash from e7uity mutual and
e6change4traded funds, and an e7ually sharp drop in investor sentiment survey.

8lobal 9T:s that focus on stocks, for instance, saw outflows just short of ;< billion in
"anuary, according to #tate #treet 8lobal %dvisors.

=ow comes :ebruary, though, and investors seem willing to forget that messy start and get
back on the bullish trail.

'(ead more) Investors running from stocks like it's 20 again /

"ust a week after reporting a multiyear high in pessimism, the %merican %ssociation of
Individual Investors saw bullishness make its biggest jump since last summer.

It's all creating a difficult environment for those trying to strategi>e a market that will have to
deal with less stimulus from the :ederal (eserve and an economic recovery stalled by a
stunningly awful winter.

0If you're a trader and good, maybe this is a wonderful year,0 said ,aulsen, who holds an
otherwise bullish long4term market view. 0If you're not, I think it's just going to be frustrating
as hell.0

The news flow :riday e6emplified what investors are up against.

'(ead more) ?yron 1ien e6pects 20 percent gain for #+, @00 /

?ank of %merica 3errill Aynch had been warning for weeks that the "anuary pullback had
momentum and likely would continue after a momentary test of market highs. Bn :riday,
3ac=eil 2urry, the firm's top technical strategist, flatly labeled that view 0wrong,0 telling
clients in a note that ?of% is now bullish, as 0the larger uptrend has resumed.0

Bn the fundamental side, the firm uses five indicators to measure investor behavior through
surveys, fund flows and asset allocations. 1hen any of the signs tilt too far in one direction,
the firm takes the opposite stance. #o if everybody's buying, ?of% is selling.

,redictably, few of the indicators are providing a particularly strong sign in either direction,
though the balance is tilting toward the bulls.

That's especially prevalent in what the firm calls its #ell4#ide Indicator, which continues to
show high levels of fear on 1all #treet.

01all #treet's bearishness remains nearly as e6treme as it was at the market lows of 3arch
200-,0 3ichael Cartnett, ?of%'s chief investment strategist, said in a note. 09ven though the
#+, @00 has risen by DaboutE 50. since sentiment bottomed, history suggests that strong
e7uity returns can last for years after the indicator troughs.0

'(ead more) 1eather not the only economic headwind) ,ro /

1ith such a di>>ying array of cross4signals, then, the lesson for investors probably is simply
to find opportunities where you can.

,aulsen at 1ells 2apital, for instance, recommends that investors look for unloved areas
such as utilities and materials, and some under4the4radar moves in commodities.

*eith #pringer, head of #pringer Investment %dvisory, finds the behavior 0very normal0 in the
wake of a big year and thinks investors with a strong enough appetite for risk will do well.

0?asically everyone was ending the year with tremendous positive sentiment,0 he said. 0#o if
it's obvious, it's obviously wrong. This could be a year you sell in 3ay and go away, but I'm a
buyer here.0

F?y 2=?2's "eff 2o6. :ollow him on Twitter G"eff2o62=?2com .