This page has been archived and commenting is disabled.
Investor Sentiment: The Sweet Spot
As hard as it is to
believe, last week's "fat
pitch" is this week's "sweet spot". As expected
after last week's gyrations, investor sentiment remains decidedly bearish, and
this is a bullish signal as gains can be made at an accelerated pace IF the
market turns around. This remains a big "IF". Yet as the data
shows, the highest probability for a market turn around is in the second week
of extreme bearish sentiment. We are now in that "sweet spot".
{click on charts to enlarge}
- advertisements -
Informal Poll :
How many of your parents or seniors you know have 1.6million saved?
thanks
Check out Yahoo Finance today--a great article on whether to retire early or wait, if you only have around $1.6 million saved up at age 50. (Might be better to stay on flipping those burgers until you're 65. Would you like fries with that?)
We have much more downside to go. Timmy and Bennie want QE2, but they will have no hope of getting it pushed through until we see panic in the markets (again) and the banksters are able to convince everyone that the world will end if the Fed, ahhh...I mean US taxpayer doesn't come to the rescue. And to reiterate what Bruce Krasting posted in one of his articles last week - QE2 is the last bullet the Fed has, so they can't afford to waste it by using it too early or they'll end up with something like the European bailout that lasted all of a week before things started to unravel again. For what it's worth, I don't see them loading the QE gun until we see S&P back down in the 800's at least.
Updated DOW charts:
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
Look at your own charts Tech! I see several periods where the line turned green and the market continued to sell off. Your indicator only works once it turns, so it is lagging. Otherwise, you are just building a better knife-catcher.
This is working already!
re: Investor Sentiment: The Sweet Spot by technicaltake
I too have read Mamis "When to sell" and "The Nature of risk."
But even he would point out that things have changed (see http://mamis.com/samples/letter_sample.pdf from 09 as an example)
The sentiment indactors may function a bit different than before.
With every FX trader desk I have heard, with the previoiusly noted late-to-the-death-of-the-euro party BA, is calling for parity. We blew through 120 like a hot knive through butter and it doesn't seem to me like we are done. I would think we test 1015-1040 the first part of the week. We may bounce after that, but sure looks to me like the Fib around 885 is calling. Too many important trrend lines were violated on Friday on weekly and monthly charts. I think the quants will drive us to the inevitable sooner than later.
Gotta love the TA fools...
"If it goes higher, then it's going even higher! BUY BUY BUY!!"
"If it goes lower, then it's going even lower! SELL SELL SELL!!"
Uh, huh. Yep.
IF it gets cloudy it will rain....maybe
IF the light turns green you can drive through the intersection....maybe
IF you elect the Bama boy he will solve all your problems....cha.....
IF you give your money to GS you will be rewarded handsomely....cha
IFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIFIF
Sweet spot my ass. The prospect of government intervention makes a mockery of the whole notion of free and efficient markets. In-duh-vidual investors will be brutalized and raped. It's just gambling.
As for gambling, why not stick with the legit casinos? At the minimum, they offer a sense of order and decorum, and unlike the capital markets, the rules don't change from day to day.
Not to mention the free drinks and $9.99 Prime Rib Specials.
putting your money on a big IF is nothing more then gambling.
I prefer to call it something more palatable like "gaming".
Considering that each of us had about a 1 in 360,000,000 chance of even being conceived and an even lesser chance of being born, I'd consider most of life a huge gamble with only one outcome and with lousy odds of 100 to 100 against, to boot.
Go big or Go home.
Yeah, but nobody here gets out alive.
Speak for yourself.
your putative immortality aside, tech up there seems to say that investors being bearish is a bullish signal. is that really so? extreme bearishness over a long time with recently reversing bullish market action seems a good technical bullish signal. but more than a year of relatively and recently (april) quite bullish sentiment and consonant market action followed by a very strong reversal of market action (and a less strong but consonant sentiment reversal) is not usually a bullish sign. in fact it is usually the opposite.
jobs are a lagging indicator no more.
John Q public is getting it in the neck and no amount of Bob Dallie, Cnbc, MSM propaganda can overcome the fact the homes are not selling the kids just graduating have no jobs,the unemployed are all around them.
Dipping into IRA and savings to live while they see Banksters getting mega bonus tax money.
They see a government unable to respond to One ,yes one, oil well leak.. and are shocked the government is so inept-
They have lost any trust in Gov or Wall st. as IRA's and savings have been raped.
for the bulls where are the positives, that moves the markets higher??? where Asia ?? what area of the globe does not have major debt issues ?? export to where??..earnings based on cutting jobs to the bone?
perhaps I put too fine a point on it.