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FEAR/GREED SENTIMENT INDEX – AUGUST 10, 2017

August 11th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Greed” range at 31. This indicator is now suggesting that the general stock market is approaching a buying opportunity. That signal will be triggered by a reading below 25 in the “Extreme Fear” zone.

Thus as far as sentiment goes, an important signal may come as early as Friday or Monday. This would be a “buy the dip” strategy which one day will prove to be wrong. But this market has been really resilient to declines and until proven otherwise, I’d expect another rally to new highs to occur when this current decline ends.

 

FEAR/GREED SENTIMENT INDEX – JULY 25, 2017

July 26th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Extreme Greed” range at 81. This indicator is now suggesting that the general stock market is in the danger zone. This means that it’s not the time to buy in order to go long equities. Instead, it’s a probably best to lightened up on extended positions and reduce your risk.

And while the market may correct, bottom, and return to this same price level, it’s usually prudent to begin taking your gains especially when the sentiment is overextended like it is now. When the technicals and the sentiment confirm each other, it’s smart to anticipate an immediate trend change. That doesn’t necessarily mean going short because that in itself is a whole different game to play for most.

Note: A chapter in my book, Wall Street Craps: How to Play Today’s Hot & Cold Stock Market for Fast Money With Less Risk, deals with the unexpected unique challenges of playing the short vs. the traditional long game of stock market investing & the dangers of leveraged short Exchange-Traded Funds.

FEAR/GREED SENTIMENT INDEX – JULY 16, 2017

July 16th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Greed” range at 64. This indicator leaves room for the market to rally further until it reaches unsafe territory in the “Extreme Greed” area.

A few weeks ago, this indicator gave a one-day reading of 25 in the “Extreme Fear” range. That proved to be the bottom in retrospect as this bull market continues to power through. With that in mind, it’s probably wise to avoid any short positions and await the next oversold reading in the breadth oscillators or an “Extreme Fear” reading below 26 in the Fear/Greed Sentiment Index in order to take additional long positions.

But at this point, taking profits would not be such an unwise thing to do in anticipation of the next sharp downdraft with seems likely to occur after an “obvious” piece of good public news (like the passing of the new health act).

FEAR/GREED SENTIMENT INDEX – MAY 31, 2017

May 31st, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the neutral range today despite being at the higher part of the trading range. This could have multiple interpretations. For me, I see this as a potential buy signal after a relatively short period of price weakness. That weakness could translate into “Extreme Fear” in this indicator without too much damage to the present price structure. If we should get a reading in the “Extreme Fear” area accompanied by “oversold” reading in many breadth indicators, we could find another “dip” to ride the market up for another spectacular rally. Until proven otherwise, continue to look at “oversold” and “under-loved” conditions as opportunities to buy.

FEAR/GREED SENTIMENT INDEX – APRIL 14, 2017

April 15th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has finally moved into the “Extreme Fear” range this past week. But it is just touching that area and I would expect a reading under 20 in order to feel like it is truly registering “Extreme Fear.”

But this indicator is now saying that it’s time to start thinking about accumulating pilot positions for the next rally. The challenge is that there hasn’t been much price erosion in the market since its March top. Hence, many positions are still well over their 200-day moving averages with plenty more room to correct.

I’d look at this indicator as simply a sign to start thinking about going long the general market and use other breadth indicators to fine-tune the timing. And many of the breadth indicator are starting to flash buy alerts as well. So a bottom is close at hand unless we rally quickly to lessen the downward pressure.

 

FEAR/GREED SENTIMENT INDEX – JANUARY 17, 2017

February 18th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has moved back into the “Extreme Greed” range this past week. This is one of the pre-conditions for an intermediate stock market top. The prudent thing to do would be to lightened up on any over-extended long positions on further strength in the market. There will be another time later on when stocks will be of greater value than is present right now. Remember that tops take longer time to form than bottoms, so you don’t have to sell right this minute. The main thing is to know that this is a golden opportunity to get a very good price for any stocks that you’ve purchased at lower prices. You can always buy back in at lower prices later on – “The Wall Street Casino will always be open.”

Note: I consider an “Extreme Greed” reading as over 80. This reading may occur several times in a “sell” area. In the present epic rally, I’d even expect readings closer to 95-100 before an actual downturn ensues.

FEAR/GREED SENTIMENT INDEX – DECEMBER 22, 2016

December 22nd, 2016 Comments off

Today’s  “Fear/Greed Sentiment Index” reading has moved from “Extreme Greed” to “Greed” as of this week. Any return to new highs by the Major Indices will most likely move the needle back into the “Extreme Greed” territory. However, this second return to “Extreme Greed” territory will most likely signal the final rally of this move. Expect the first weeks of January to be tricky and counter-intuitive.

FEAR/GREED SENTIMENT INDEX – DECEMBER 10, 2016

December 10th, 2016 Comments off

fear-and-greed-december-9Last week’s stock market strategy report said that the general market was surprisingly “oversold” and ready for an extension of the post-election rally. We certainly got that rally and more with the “Fear/Greed Sentiment Index” pushing into the “Extreme Greed” range for all 5 days. I would still expect a few days with readings over 90 before this rally has exhausted itself. But this is still no place to be going long and only the pros should consider heavy betting on the downside. If you’re inclined to trade, this may be a time to step aside and let the market zig-zag higher with non-confirmations or zig-zag lower into another short-term oversold condition. Either of these scenarios appears to be more than a week away. So stay on the sidelines and let the market set itself up for the next trading opportunity.

FEAR/GREED SENTIMENT INDEX – NOVEMBER 27, 2016

November 27th, 2016 Comments off

fear-greed-nov-26This indicator is labeled as being in the “Greed” zone right now.  Ideal buying opportunities have only occurred when the general market has been in the “Extreme Fear” zone. Conversely, optimal selling opportunities tend to occur when the general market has been in the “Extreme Greed” zone. This suggests that the market needs a little more time in order to generate greater greed in order to sell. So don’t be surprised if the market continues to zig-zag its way to higher highs. With the strength of this move, the market can stay in the “Extreme Greed” area for over  a week as well.

FEAR/GREED SENTIMENT INDEX – OCTOBER 15, 2016

October 15th, 2016 Comments off

fear-greed-oct-15This indicator is labeled as being in the “Fear” zone right now.  Ideal buying opportunities have only occurred when the general market has been in the “Extreme Fear” zone. This suggests that the market needs a little more time in order to generate greater fear. This will help set for a better intermediate-term buying opportunity. That could happen as early as next week. (Source: http://money.cnn.com/data/fear-and-greed)