-
Welcome to the TSP Talk Forums forums.
You are currently viewing our boards as a guest which gives you limited access to view most discussions and access our other features. By joining our free community you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content, join our AutoTracker, and access many other special features. Registration is simple and absolutely free so please, join our community today!
If you have any problems with the registration process or your account login, please contact us. -
Please read our AutoTracker policy on the IFT deadline and remaining active. Thanks!
-
$ - Premium Service Content (Info) | AutoTracker Monthly Winners | Is Gmail et al, Blocking Our emails?
Find us on: Facebook & X | Posting Copyrighted Material
-
-
Join the TSP Talk AutoTracker: How to Get Started | Login | Main AutoTracker Page
-
The Forum works well on MOBILE devices without an app: Just go to: https://forum.tsptalk.com ...
Or you can now use TapaTalk again!
Market Talk / Feb. 4 - 10
- Thread starter Spaf
- Start date
robo
Well-known member
Market Momentum and Volatility
By Bill
There’s been a lot of chatter about the “streak” and the “imminent, necessary correction,” as well as concern about the low levels of volatility in the overall stock market over the last few years. As I discussed in Streaks, Distributions, Black Swans, and Golden Swans, such streaks are not unusual in the history of the stock market. It’s rare to see mention of the lack of UPSIDE volatility for the same period.
The idea that the current low level of volatility is “unusual” or “strange” can be easily debunked with data.
I took S&P 500 daily data for the last half a century and put it in Excel, and calculated a very long-term momentum indicator called the PPO, with a short moving average of 252 days and a long moving average of 546 days. This is really a standard (12/26) monthly MACD converted into daily terms, since one month has about 21 trading days, and expressed as a percentage. I call this the “daily equivalent of monthly PPO.” I will also note whether each point is higher or lower than the equivalent point one month ago (21 trading sessions).
I then used Excel to calculate the standard deviation of the closing prices for the S&P 500. You may be familiar with the standard deviation from its use in Bollinger Bands, and it is a universally accepted measure of price volatility. I calculated it over a 45-day period, express it in percentage terms with the denominator being the 45-day simple moving average of price, and call it “percentage volatility.”
Here is a graph of the relationship between rising or falling “daily equivalent of monthly PPO” and the average “percentage volatility” at each 1/10 point of the momentum indicator.
As you can see, when the long-term PPO indicator is in the upper-mid-range of its historic values, volatility is lower than when the momentum is very high or very low. Note also that when the long-term PPO indicator is rising while it is in this range, the volatility is still lower. The most daily volatility is experienced in profound bear markets, where the PPO is very negative and has been falling. Generally speaking, bull markets (rising PPO) have lower volatility than bear markets (falling PPO). I included the regression polynomial and the R-Square with formulae so that you can see the accuracy of the fit.
You might wonder, OK, where are we now in terms of this long-term PPO indicator? Here’s a chart for you!
In light of the data, it’s plain that our current low level of volatility is not anything to be afraid of; rather, it is a natural part of where we are in terms of market movement.
http://billakanodoodahs.com/
By Bill
There’s been a lot of chatter about the “streak” and the “imminent, necessary correction,” as well as concern about the low levels of volatility in the overall stock market over the last few years. As I discussed in Streaks, Distributions, Black Swans, and Golden Swans, such streaks are not unusual in the history of the stock market. It’s rare to see mention of the lack of UPSIDE volatility for the same period.
The idea that the current low level of volatility is “unusual” or “strange” can be easily debunked with data.
I took S&P 500 daily data for the last half a century and put it in Excel, and calculated a very long-term momentum indicator called the PPO, with a short moving average of 252 days and a long moving average of 546 days. This is really a standard (12/26) monthly MACD converted into daily terms, since one month has about 21 trading days, and expressed as a percentage. I call this the “daily equivalent of monthly PPO.” I will also note whether each point is higher or lower than the equivalent point one month ago (21 trading sessions).
I then used Excel to calculate the standard deviation of the closing prices for the S&P 500. You may be familiar with the standard deviation from its use in Bollinger Bands, and it is a universally accepted measure of price volatility. I calculated it over a 45-day period, express it in percentage terms with the denominator being the 45-day simple moving average of price, and call it “percentage volatility.”
Here is a graph of the relationship between rising or falling “daily equivalent of monthly PPO” and the average “percentage volatility” at each 1/10 point of the momentum indicator.
As you can see, when the long-term PPO indicator is in the upper-mid-range of its historic values, volatility is lower than when the momentum is very high or very low. Note also that when the long-term PPO indicator is rising while it is in this range, the volatility is still lower. The most daily volatility is experienced in profound bear markets, where the PPO is very negative and has been falling. Generally speaking, bull markets (rising PPO) have lower volatility than bear markets (falling PPO). I included the regression polynomial and the R-Square with formulae so that you can see the accuracy of the fit.
You might wonder, OK, where are we now in terms of this long-term PPO indicator? Here’s a chart for you!
In light of the data, it’s plain that our current low level of volatility is not anything to be afraid of; rather, it is a natural part of where we are in terms of market movement.
http://billakanodoodahs.com/
robo
Well-known member
Friday, February 09, 2007
Observation On The Dow Jones Industrials
One thing I always look for in the market are patterns. There are all kinds of patterns such as seasonal, open to close patterns, time of day patterns, price patterns, inter market relationship patterns, fade your friend pattern, range contraction and range expansion.....etc.
For example when I am day trading, I'll look to see what time of day money tends to come into the market. Sometimes it's uncanny how trending moves can be predicted if you are aware of when money enters and leaves the market.
On a much longer time frame let's take a look at a pattern I've been watching on the Dow Jones Industrials ever since this uptrend began which is July 2006.
Above is a weekly chart of the Diamonds (DIA) with a 10 week moving average which is the same as the 50 day moving average.
Look at the chart carefully and you will notice a pattern. The second week of every month tends to be an up week. In other words, the second week of the month tends to close above the open every time since this rally began. Not only is money coming into the Dow the second week of the month, but it also tends to be the largest week of the month.
How can you take advantage of this pattern? Well you can buy the Diamonds on Monday morning and exit on Friday's close that's one way. Another way might be to only take buy signals next week if you are day trading. This is probably how I will trade this pattern.
Will next week be an up week in the Dow? Will next week also be the largest week of the month? We'll find out next Friday.
http://kevinsmarketblog.blogspot.com/
Observation On The Dow Jones Industrials
One thing I always look for in the market are patterns. There are all kinds of patterns such as seasonal, open to close patterns, time of day patterns, price patterns, inter market relationship patterns, fade your friend pattern, range contraction and range expansion.....etc.
For example when I am day trading, I'll look to see what time of day money tends to come into the market. Sometimes it's uncanny how trending moves can be predicted if you are aware of when money enters and leaves the market.
On a much longer time frame let's take a look at a pattern I've been watching on the Dow Jones Industrials ever since this uptrend began which is July 2006.
Above is a weekly chart of the Diamonds (DIA) with a 10 week moving average which is the same as the 50 day moving average.
Look at the chart carefully and you will notice a pattern. The second week of every month tends to be an up week. In other words, the second week of the month tends to close above the open every time since this rally began. Not only is money coming into the Dow the second week of the month, but it also tends to be the largest week of the month.
How can you take advantage of this pattern? Well you can buy the Diamonds on Monday morning and exit on Friday's close that's one way. Another way might be to only take buy signals next week if you are day trading. This is probably how I will trade this pattern.
Will next week be an up week in the Dow? Will next week also be the largest week of the month? We'll find out next Friday.
http://kevinsmarketblog.blogspot.com/
robo
Well-known member
Daily Market Commentary
Comments: Feb 9, 2007
Long: 75% Rydex Dynamic OTC, 25% money market for Monday. Our accounts had a good week while the markets headed lower. We are now positive for 2007. If you haven't read the Feb 8th comment read it now as it outlines the week ahead. I think the bulls will see encouragement in the high sailing Fortress hedge fund IPO and Friday's pull back in the indexes; viewing this as a time to buy and pushing the markets higher on Monday. But remember it was a group of professionals that launched the IPO to "cash out" instead of cashing in on the 2% +20% of profits that investors toss at them. This means to me that they think the party is almost over for the high fees and high returns that they accumulated before they had 3000 other hedge funds as competition.
http://stocmarket.com/commentp.htm
Comments: Feb 9, 2007
Long: 75% Rydex Dynamic OTC, 25% money market for Monday. Our accounts had a good week while the markets headed lower. We are now positive for 2007. If you haven't read the Feb 8th comment read it now as it outlines the week ahead. I think the bulls will see encouragement in the high sailing Fortress hedge fund IPO and Friday's pull back in the indexes; viewing this as a time to buy and pushing the markets higher on Monday. But remember it was a group of professionals that launched the IPO to "cash out" instead of cashing in on the 2% +20% of profits that investors toss at them. This means to me that they think the party is almost over for the high fees and high returns that they accumulated before they had 3000 other hedge funds as competition.
http://stocmarket.com/commentp.htm
robo
Well-known member
Best and Worst Performing Stocks Year to Date
The tables below highlight the best and worst performing stocks in the Russell 3000 over the past 5 days, the past 3 months, and year to date.
http://tickersense.typepad.com/ticker_sense/2007/02/best_and_worst__1.html
The tables below highlight the best and worst performing stocks in the Russell 3000 over the past 5 days, the past 3 months, and year to date.
http://tickersense.typepad.com/ticker_sense/2007/02/best_and_worst__1.html
robo
Well-known member
Not annoying too me at all. Just opinions and market observations. ( Food for thought ) It's just like buying using sentiment or calendar studies, some trade using it and others think it's ridiculous. I follow it closely.
Take care!
Robo
In Mike Burk's opinion we will be up next week. However, others think down!
Conclusion
The market is still overbought, however, some of that overbought condition was relieved Friday and seasonality next week is positive.
I expect the major indices to be higher on Friday February 16 than they were on Friday February 9.
This report is free to anyone who wants it, so please tell your friends.
They can sign up at:
http://alphaim.net/signup.html
If it is not for you, reply with REMOVE in the subject line.
Gordon Harms produces a Power Point for our local timing group. You can get a copy of that at: http://www.stockmarket-ta.com/
After hitting all time or multi year highs on Thursday, all of the major indices declined on Friday leaving them with modest losses for the week making last weeks positive forecast a miss.
Thank you,
Mike Burk
YTD W2/L1/T3
Wrngway
Member
Robo, I was only referring to the last line. I didn't mean to discount the article. In fact
I appreciate your contributions. As I'm a bit new to active trading I'm trying to learn all that I can. The diversity of opinions can be both refreshing and frustrating at the same time.
For what it's worth, I'm thinking that Friday was a bit of an overreaction to oil and fed speak.
Good luck next week!
robo
Well-known member
Tom,
Thanks for posting Fred's signal. I just received a conditional sell for Monday about two hours ago from another Trading system. TA's are at work this weekend modeling for next week's Market. As you well know all systems are going to get whipsawed. It's happened to me plenty from the systems/services I'm using. That's the way trading systems work. The other systems I'm following are:
1 Cash
2 Longs
2 Sell
Next week we will see which model got it correct. However, capital preservation is the most important thing here over more upside. Risk/Reward!
I have some small long positions for Monday, but I'm going to look close at my stops this weekend. I'm hoping for a gap up Monday and I just might take the profits. This could be a Bear Trap or the start of something bigger. The shorts are building up again, but they have paid all last year. This month would be a good time too try and take it down, but there is still plenty of liquidity and dippers hanging around. Watch out if 1425 fails we could head to 1400 pretty quick. On the other hand, it could be more pain for the BEARS!!(GROWL)
After Friday's sell-off some of the Bears came out of their caves. The question is will it scare the weak Bulls, or will the Boyz, "Pump up the Jam, Pump it up!" I meant money. I'm not getting much feedback that institutions are doing a lot of selling just yet. When they do this Market is headed down and quick.
robo
Well-known member
I don't post to many of my own opinions any more. However, I try and post both Bull and Bear posts, so maybe it will help all of us to make better and smarter investing and trading decisions. I make very few moves in my TSP account compared to others, but I am a Market Timer. That's for sure... I trade pretty active in my Scottrade account using my Roth IRA.
Take care!
Robo
Oh, and thanks for next week. The Bulls are still in charge, but can they hang on next week? As for your thinking, I agree. I went long at the close on Friday, but will put stops in place just in case!
robo
Well-known member
Birchtree,
You will enjoy this article.
Market Week in Review
S&P 500 1,438.06 -.71%*
Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was mildly bearish. The advance/decline line fell slightly, most sectors declined and volume was above-average on the week. Measures of investor anxiety were mostly higher. The AAII percentage of Bulls fell to 46.2% this week from 46.3% the prior week. This reading is still at average levels. The AAII percentage of Bears fell to 30.0% this week from 30.5% the prior week. This reading is still slightly above average levels. The 10-week moving average of the percentage of Bears is currently 34.3%, an above-average level. The 10-week moving average of the percentage of Bears peaked at 43.0% at the major bear market low during 2002. Moreover, the 50-week moving average of the percentage of Bears is 36.8%, a very high level seen during only two other periods since tracking began in the 80s.
I continue to believe that steadfastly high bearish sentiment in many quarters is mind-boggling, considering the S&P 500's 19.0% rise in about eight months, one of the best August/September/October runs in U.S. history, the fact that the Dow made another all-time high this week, the macro backdrop for stocks is improving and that we are in the early stages of what is historically a very strong period for U.S. stocks after a midterm election. As well, despite recent gains, the forward P/E on the S&P 500 is a very reasonable 15.8, falling from 16.2 at the beginning of the year, due to the historic run of double-digit profit growth increases. The S&P P/E multiple has contracted for three consecutive years. It has only contracted four consecutive years two times since 1905. Each point of multiple expansion is equivalent to a 6.6% gain in the S&P 500. Bears still remain stunningly complacent, in my opinion. As I have said many times over the last few months, every pullback is seen as a major top and every move higher is just another shorting/selling opportunity. I see few signs of capitulation by the many bears. Even most bulls have raised cash of late, anticipating a correction after the recent surge.
As well, there are many other indicators registering high levels of investor skepticism regarding recent stock market gains. The 50-day moving average of the ISE Sentiment Index just recently crossed above the 200-day moving average for the first time since November 2005 and is already rolling over. The ISE Sentiment Index plunged to a depressed 97.0 on Monday. Nasdaq and NYSE short interests are very close again to record highs. Moreover, public short interest continues to soar to record levels, and U.S. stock mutual funds have seen outflows for most of the last year, according to AMG Data Services. The percentage of U.S. mutual fund assets in domestic stocks is the lowest since at least 1984, when record-keeping began. There has been a historic explosion of hedge funds created with absolute return, low correlation or negative correlation U.S. stock strategies that directly benefit from the perception of a stagnant or declining US stock market. Commodity funds, which typically have a low or negative correlation with stocks, have been created in record numbers. Research boutiques with a negative bias have sprung up to cater to these many new funds. Wall Street analysts have made the fewest "buy" calls on stocks this year since Bloomberg began tracking in 1997. "Buy" calls have been trending lower for seven months through most of last year's rally. Many of the most widely read stories on financial sites are written with a pessimistic slant to gain readers. Investment blogger bullish sentiment is still bearish at 32.3% Bulls, 38.7% Bears. Finally, the UltraShort QQQQ ProShares (QID) continues to see surging volume. There is still a high wall of worry for stocks to climb substantially from current levels as the public remains very skeptical of this bull market.
I continue to believe this is a direct result of the strong belief by the herd that the U.S. is in a long-term trading range or secular bear environment. There is still overwhelming evidence that investment sentiment by the general public regarding U.S. stocks has never been this poor in history, with the Dow registering all-time highs almost weekly. This is serving to further widen the so-called “wealth gap.” I still expect the herd to finally embrace the current bull market this year, which should result in another substantial move higher in the major averages as the S&P 500 breaks out to an all-time high to join the Dow and Russell 2000.
Only in a "negativity bubble" could Wall Street strategists' consensus predictions of a 7% gain for the S&P 500 this year be characterized as "very bullish" by the many bearish pundits. The historical average gain for the S&P 500 is 8.3%. A recent UBS investor sentiment survey hit a three-year high and was characterized as “very bullish,” yet only 37% of respondents expected a gain in the DJIA this year. Moreover, of those 37% that expected a gain, only 11% thought the DJIA would rise over 10%. As well, many of the so-called “bullish” U.S. investors are only "really bullish" on commodity stocks and U.S. companies with substantial emerging markets exposure, not the broad U.S. stock market. Finally, how many investors are bullish on "growth" stocks? There are very few true "growth" investors even left after six years of underperformance. Based on the action so far this year, I suspect even more cash has piled up on the sidelines. I continue to believe significant portion of this cash will be deployed into “true growth” companies as their outperformance versus “value” stocks gains steam throughout the year. Finally, I still believe the coming bullish shift in long-term sentiment with respect to U.S. stocks will result in the "mother of all short-covering rallies."
http://hedgefundmgr.blogspot.com/
You will enjoy this article.
Market Week in Review
S&P 500 1,438.06 -.71%*
Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was mildly bearish. The advance/decline line fell slightly, most sectors declined and volume was above-average on the week. Measures of investor anxiety were mostly higher. The AAII percentage of Bulls fell to 46.2% this week from 46.3% the prior week. This reading is still at average levels. The AAII percentage of Bears fell to 30.0% this week from 30.5% the prior week. This reading is still slightly above average levels. The 10-week moving average of the percentage of Bears is currently 34.3%, an above-average level. The 10-week moving average of the percentage of Bears peaked at 43.0% at the major bear market low during 2002. Moreover, the 50-week moving average of the percentage of Bears is 36.8%, a very high level seen during only two other periods since tracking began in the 80s.
I continue to believe that steadfastly high bearish sentiment in many quarters is mind-boggling, considering the S&P 500's 19.0% rise in about eight months, one of the best August/September/October runs in U.S. history, the fact that the Dow made another all-time high this week, the macro backdrop for stocks is improving and that we are in the early stages of what is historically a very strong period for U.S. stocks after a midterm election. As well, despite recent gains, the forward P/E on the S&P 500 is a very reasonable 15.8, falling from 16.2 at the beginning of the year, due to the historic run of double-digit profit growth increases. The S&P P/E multiple has contracted for three consecutive years. It has only contracted four consecutive years two times since 1905. Each point of multiple expansion is equivalent to a 6.6% gain in the S&P 500. Bears still remain stunningly complacent, in my opinion. As I have said many times over the last few months, every pullback is seen as a major top and every move higher is just another shorting/selling opportunity. I see few signs of capitulation by the many bears. Even most bulls have raised cash of late, anticipating a correction after the recent surge.
As well, there are many other indicators registering high levels of investor skepticism regarding recent stock market gains. The 50-day moving average of the ISE Sentiment Index just recently crossed above the 200-day moving average for the first time since November 2005 and is already rolling over. The ISE Sentiment Index plunged to a depressed 97.0 on Monday. Nasdaq and NYSE short interests are very close again to record highs. Moreover, public short interest continues to soar to record levels, and U.S. stock mutual funds have seen outflows for most of the last year, according to AMG Data Services. The percentage of U.S. mutual fund assets in domestic stocks is the lowest since at least 1984, when record-keeping began. There has been a historic explosion of hedge funds created with absolute return, low correlation or negative correlation U.S. stock strategies that directly benefit from the perception of a stagnant or declining US stock market. Commodity funds, which typically have a low or negative correlation with stocks, have been created in record numbers. Research boutiques with a negative bias have sprung up to cater to these many new funds. Wall Street analysts have made the fewest "buy" calls on stocks this year since Bloomberg began tracking in 1997. "Buy" calls have been trending lower for seven months through most of last year's rally. Many of the most widely read stories on financial sites are written with a pessimistic slant to gain readers. Investment blogger bullish sentiment is still bearish at 32.3% Bulls, 38.7% Bears. Finally, the UltraShort QQQQ ProShares (QID) continues to see surging volume. There is still a high wall of worry for stocks to climb substantially from current levels as the public remains very skeptical of this bull market.
I continue to believe this is a direct result of the strong belief by the herd that the U.S. is in a long-term trading range or secular bear environment. There is still overwhelming evidence that investment sentiment by the general public regarding U.S. stocks has never been this poor in history, with the Dow registering all-time highs almost weekly. This is serving to further widen the so-called “wealth gap.” I still expect the herd to finally embrace the current bull market this year, which should result in another substantial move higher in the major averages as the S&P 500 breaks out to an all-time high to join the Dow and Russell 2000.
Only in a "negativity bubble" could Wall Street strategists' consensus predictions of a 7% gain for the S&P 500 this year be characterized as "very bullish" by the many bearish pundits. The historical average gain for the S&P 500 is 8.3%. A recent UBS investor sentiment survey hit a three-year high and was characterized as “very bullish,” yet only 37% of respondents expected a gain in the DJIA this year. Moreover, of those 37% that expected a gain, only 11% thought the DJIA would rise over 10%. As well, many of the so-called “bullish” U.S. investors are only "really bullish" on commodity stocks and U.S. companies with substantial emerging markets exposure, not the broad U.S. stock market. Finally, how many investors are bullish on "growth" stocks? There are very few true "growth" investors even left after six years of underperformance. Based on the action so far this year, I suspect even more cash has piled up on the sidelines. I continue to believe significant portion of this cash will be deployed into “true growth” companies as their outperformance versus “value” stocks gains steam throughout the year. Finally, I still believe the coming bullish shift in long-term sentiment with respect to U.S. stocks will result in the "mother of all short-covering rallies."
http://hedgefundmgr.blogspot.com/
Last edited:
robo
Well-known member
Results of Rate Cut Poll
Earlier in the week, we asked readers if or when they thought the Fed would cut interest rates. As the results of the poll below show, almost exactly half of our readers didn't think the Fed would cut rates from now through December of this year. The rest of the results were spread pretty evenly, but the overall indication is that readers do not expect a rate cut anytime soon.
http://tickersense.typepad.com/
Earlier in the week, we asked readers if or when they thought the Fed would cut interest rates. As the results of the poll below show, almost exactly half of our readers didn't think the Fed would cut rates from now through December of this year. The rest of the results were spread pretty evenly, but the overall indication is that readers do not expect a rate cut anytime soon.
http://tickersense.typepad.com/
robo
Well-known member
Saturday, February 10, 2007
The MUPT Strikes Again.
We've all no doubt heard of the infamous PPT or Plunge Protection Team, which according to conspiracy theory bears is actively involved in propping up the stock market. Well, according to market guru Don Wolanchuk, there is instead a MUPT or Melt-Up Protection Team at work keeping a lid on the stock market to keep it from rising too quickly. It makes sense on the surface that the Fed in addition to protecting against market melt-downs would also want to guard against market melt-ups, to prevent asset bubbles that might destabilize the financial system. It seems hardly coincidental that whenever stock market sentiment is getting a bit frothy that the Fed talking heads are trotted out to dampen the enthusiasm with a barrage of hawkish jawboning. Friday was no exception, as rate hike warnings by several Fed talking heads put the kibosh on what was previously looking like a very nice upside breakout in the making.
So, does this change the outlook for an imminent explosion in bullish sentiment and speculative orgy in stocks. The short answer is not at all, it just means we might have a temporary detour south beforehand. Unlike the idealized Cycle of Market Emotions, which smoothly transitions from Despondency to Euphoria, in the real world the journey is much more choppy. For every 2 steps forward you get one step back. This is precisely how most investors miss out on the vast majority of a bull market. Ironically it is not until the final stages of the bull when the the market goes parabolic in order to suck in the herd. And since we are not yet in that final "run for the roses", we still have to deal with some choppy action. However, even in spite of the incessant jawboning from the MUPT, eventually (and I expect sooner that later) this bull will enter it's final parabolic rally to complete the Cycle of Market Emotions. And I will do my best to help us to navigate this transition with the help of my market sentiment indicators.
posted by zentrader at 4:57 PM
http://www.zentrader13.blogspot.com/
The MUPT Strikes Again.
We've all no doubt heard of the infamous PPT or Plunge Protection Team, which according to conspiracy theory bears is actively involved in propping up the stock market. Well, according to market guru Don Wolanchuk, there is instead a MUPT or Melt-Up Protection Team at work keeping a lid on the stock market to keep it from rising too quickly. It makes sense on the surface that the Fed in addition to protecting against market melt-downs would also want to guard against market melt-ups, to prevent asset bubbles that might destabilize the financial system. It seems hardly coincidental that whenever stock market sentiment is getting a bit frothy that the Fed talking heads are trotted out to dampen the enthusiasm with a barrage of hawkish jawboning. Friday was no exception, as rate hike warnings by several Fed talking heads put the kibosh on what was previously looking like a very nice upside breakout in the making.
So, does this change the outlook for an imminent explosion in bullish sentiment and speculative orgy in stocks. The short answer is not at all, it just means we might have a temporary detour south beforehand. Unlike the idealized Cycle of Market Emotions, which smoothly transitions from Despondency to Euphoria, in the real world the journey is much more choppy. For every 2 steps forward you get one step back. This is precisely how most investors miss out on the vast majority of a bull market. Ironically it is not until the final stages of the bull when the the market goes parabolic in order to suck in the herd. And since we are not yet in that final "run for the roses", we still have to deal with some choppy action. However, even in spite of the incessant jawboning from the MUPT, eventually (and I expect sooner that later) this bull will enter it's final parabolic rally to complete the Cycle of Market Emotions. And I will do my best to help us to navigate this transition with the help of my market sentiment indicators.
posted by zentrader at 4:57 PM
http://www.zentrader13.blogspot.com/
