Thursday, June 14, 2018

#Sentiment Review $SPX

Sentiment
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

The sentiment model, another excellent standalone timing for US stocks, entered bull or risk on phase on 5/24. The signal has generated 31% annualized return (see Matrix). While the sentiment model is confirmed by a bull phase in the terms structure of the VIX, the majority (and headlines) remain bearish on US equities. Big mistake!

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