Have We Seen The Top?

It is truly amazing how quickly traders have become pessimistic. In particular, I like watching Fast Money on CNBC during emotional market periods because these guys tend to get it wrong during near market turns. When the trend is in force, they do well, but not at turns.

For example, during the two weeks leading up to the 3/6/09 bottom, no one on Fast Money thought it was a good time to buy stocks. They didn't recognize the extreme in market sentiment. Likewise, last week as the market was crashing, they were quick to ring the alarm bells. I haven't had a chance to watch this week due to work conflicts, but overall the sentiment turned quickly from its extreme optimism at the end of April. Today, CNBC trotted out the Black Swan guy, Nassim Taleb. They were trying to get him to call last week a Black Swan event. He would not take the bait though, and called it a Gray Swan or a White Swan even.

I think in a few weeks, we will see that although last week's action was a tell, it was not the beginning of a new downtrend.