Thursday, May 3, 2018

#Sentiment Review $SPX

The old American idiom of a day late and dollar short is an phrase easily applied to majority's ability to time (buy or sell) US stocks. The majority, influenced more by instinctual behavioral tendency of the individual to seek acceptance of an emotionally-driven crowd than act independently in the minority, views rising and falling stocks prices as bullish and bearish. This tendency that drives them chase when probabilities favor fading relegates the majority as the consistent bagholders of history's panics and trend changes.

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”, John Templeton

Subscriber Comments

Sentiment flow, another excellent standalone timing for US stocks, entered bear phase on 3/22 for a 28% annualized return. At minimum, it would have advised the bulls to sit on the sidelines for 7 weeks. #Matrix tracks sentiment for subs.


A couple of weeks ago, the experts (headlines) suggested investors were pessimistic. My response, more accurately the computer's response, was NO. Fast forward several weeks, the experts have gone mute on the subject, while the computer says, WATCH OUT investors are pessimistic (chart); Bull% (dark blue line) has entered strong pessimistic territory. Strong to extreme pessimism (concentration), a setup that's BULLISH rather than bearish as advertised by mainstream media, significantly increases the odds of stronger bottom in May-June.


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