Tuesday, August 1, 2017

Don't Let Opinions Influence Investment/Trading Discpline $SPX $VIX

The stock market continues climbing, yet the majority (investors) remain pessimistic towards stocks. This is not opinion but rather the message of the market (see Sentiment Model). As long as the majority remains pessimistic WASo at or below zero, it's highly unlikely stocks have peaked. Investors remained consistently pessimistic towards stocks despite a steady rally from 1100 to 1500 on the S&P 500 from 2004 to 2007. The tendency is known as climbing the wall of worry by the trading masters.

Don't let the trend towards rising volatility will immediate trigger a stock market top (chart).


Headline: Wall Street isn’t ready for a 1,100-point tumble in the Dow industrials

The U.S. stock market has been on such a parabolic march higher that Wall Street investors may have forgotten what a typical, sharp downturn feels like.

Indeed, much has been made about the lack of volatility. The CBOE Volatility Index VIX, -1.95% otherwise known as the “fear gauge,” had been flirting with its lowest close on record, implying that market expectations for a sharp, sudden fall are near rock bottom, as the Dow Jones Industrial Average DJIA, +0.28% S&P 500 index SPX, -0.07% and the Nasdaq Composite Index COMP, -0.42% scale new heights. (The Dow notched a fresh record on Monday)



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.