In a post that went up in November - My Mae Culpa - Not Paying More Attention to Optimism - I recounted my sins in terms of not paying attention to data and changing environments. Not wanting to repeat that same inattentive error, I have been running through some indicators to go along with yesterday's post - Percent of ETFs Near Oversold Levels Hitting Extreme Reading. This search took me back to the "All Equities Only" ratio of the ISE Sentiment Index (ISEE), which closed at 92 yesterday.

Readings below 100 are fairly uncommon and suggest skepticism, as this is a "call/put" ratio. (You can find the chart of the data here.) To put this in perspective I created the chart below which marks a blue diamond on days when the All Equities reading was below 100. There was a cluster of signals during the early part of the rally that began in mid-2006, but the rest appear to mark short-term bottoms.

The mistake I made in October was not paying attention to the change in the trend of the price action. Committing that "same" mistake again would mean ignoring strength if we do see a bounce.