Back in May, as the stock market was heading into its final decline prior to this year's seemingly improbable second half rally, I wrote an article called Dumb Money Sold in May and Went Away. Later, this view was backed up with positions in global emerging bonds and markets, global bonds, developed global markets, frontier markets, technology, energy, rare earths, lithium, silver and gold.

The article was met with several derisive comments - which I actually appreciated due to their psychological signals actually supporting the probabilities that a pivot was close at hand. A few of the best comments from the SeekingAlpha version of the article:

"Gary = Dumb Investor. Simple enough."

"You lost me at the title. If you didn't sell in May (even April like I did), then you are the dummy. Lol." [Personal cash levels were substantial heading into May, as was appropriate at the time]

"Maybe I'm the dummy here. How on earth did someone find the justification to write this drivel? The S&P 500 is down 6% or 7% since the start of May. Is the writer a little slow on the uptake? Smart money sold in May!!"

"What a horrible article, the quality of SA articles recently is definately on a downtrend."

There were also a few semi-complimentary responses, but on the whole the comments indicated a readership that had taken the term "dumb money" personally (it's just an impersonal and common analytical phrase folks, jeez) and convinced itself that the market was no place to be amid the Greece turmoil and commonly accepted wisdom of the "sell in May and go away" bromide.

Here is the updated version of the sentimentrader.com graphic that was used in the May article. While the structure is certainly much less bullish on a contrarian basis than it was in May, it is not indicating an extreme in sentiment swings just yet. In fact, the sentiment structure is in alignment with the current view that the bullish view can (not will, can) hold sway into year-end. Oh would that we can one day get a bear signal that is as strong as the improbable bull signal was last May.

Above is another graphic from sentimentrader, breaking down the structure by specific sector. As you can see, while a few sectors have sprung to over bullish, others remain in neutral territory.

Finally, here is another breakdown that dials back out to a more macro view. As you can see, we are heading toward the opposite pole from the May over bearish one but are as yet not anywhere near an extreme. The big exception is in the CoT structure, which is nowhere more bearish than it currently is in silver and gold.

To answer the title's question, the dumb money is coming back into the market to some degree. It lurches in, backs off, rationalizes its position, becomes afraid of missing the upside, becomes afraid that it is too late to make some 'coin'... and when you depersonalize it you realize that the market is just doing what it always does to one degree or another as the gentle tides of human sentiment and psychology sway back and forth over the cycles.

Currently, there seems to be a deep feeling among investors that the markets are no longer real and are excessively managed by monetary, financial and governmental authorities. If you have read me at my most tin-foil moments, you know I generally agree with that premise.

But the market is the market. I know Greece, Italy and Spain threatened to end the world as we know it. I know that Ben Bernanke seems to be the most brazenly manipulative Fed Chief yet. I know a presidential election cycle is in effect - it has helped NFTRH's analysis immensely since the May angst - and the FOMC QE decision and the conveniently positive jobs report last week were beneficial. None of this matters.

I don't want to give the impression I was confidently bullish through every step of the process. These are the markets and the whipsaw rally out of early summer was really difficult to manage. Speaking as a human (as opposed to a market letter writer/blogger), I found the process pretty annoying and frustrating. But in times of doubt (about NFTRH's 'inflationary 2012' or i2k12 theme), there was always the sentiment backdrop, along with the election year cycle and supportive technicals to lean on.

The market is bullish, subject to a clearing of some of the more over done sentiment issues currently building in the precious metals and few other areas. One day the market will be ready to get bearish; perhaps really bearish. But with dumb money not yet heavily sponsoring the bull case by this metric at least, we can (can, there is no 'will' in the markets) go higher even and perhaps especially, if October presents some corrective activity to clear the sentiment profile.