This sentiment indicator shows Bullish Sentiment at 45.83% and Non-Bullish Sentiment (Bearish + Neutral) at 54.17%. With this largely even spread between the bullish and non-bullish market stances among stock market bloggers, the general market can be deemed as “neutral” overall. That means that the market can go in either direction without bias. (Source: Ticker Sense)
STOCK MARKET STRATEGY FOR AUGUST 24, 2016: The stock market’s drop today has sent the breadth oscillators downwards towards a possible oversold condition by the beginning of next week. At this point, the market may begin to show more weakness and finally give us a clear pattern from which to trade from. So keep your powder dry and be ready to take positions in case an oversold scenario starts to take shape.
Key underlying short-term market indicators show the following:
***********
THE BOTTOM LINE: The internal indicators show that the market is finally trending downwards in unison. With today’s action, we have a pattern that may lead to a buying opportunity very shortly. This will probably be a “V-shaped” bottom without any kind of retest so be ready to take action on weakness in a few days. It may even be a spike down towards a key 200-day moving average which chartists will point to as being the pivot point. So be ready for a short-term trade on the long-side if the market sets up that way.
This sentiment indicator shows that the stock market is more bullish than bearish, but not as much as last week. In fact, the non-bullish elements of “neutral” and “bearish” add up to 52% of the survey. So based on the history of this indicator, the market is relatively neutral from a behavioral/sentiment perspective. This means that despite the long run-up since February 11, 2016, the market still has room to continue higher. (Source: Ticker Sense)
The stock market appears to be at the very end of its rally since February 11, 2016. The only thing that prevents me from being downright bearish, is the possibility that the Brexit bottom may have already flushed out the weak hands and created an intermediate-term low. But most of all, this indicator makes an investor or trader aware of the risks to holding long positions in the general market at this time. Better odds for upside appreciation seems likely at another time down the road. (Source: www.optionstrategist.com)
STOCK MARKET STRATEGY FOR AUGUST 14, 2016: The stock market has reached the top of its trading once again by posting a new all-time high on Thursday. The market may back and fill for a few more days before making what I believe will be one more new high for this move. From that new high, we should see a more substantial correction in terms of price and time. That next correction will be a dip worth buying as it will likely come back to new all-time highs once again.
Key underlying short-term market indicators show the following:
***********
THE BOTTOM LINE: We are in a neutral internal market, but at the top of the trading range. We can expect the market to either pause before making a new high this week or else push forward with a series of new highs on weakening strength. That should set-up a correction over the next few weeks and present a low risk buying opportunity for another ride up to new highs. So expect the market goes into a correction after a push to new highs this week that will become a buying opportunity worth betting on a few weeks from now.
Note: Another sign of a top is a key reversal on high volume where the market opens up strongly, reverses in mid-session, and then closes convincingly on the downside.
This unique sentiment indicator shows that the stock market is grossly over-loved at this time by blogger/stock market advisors. That means, an investor/trader should be very careful if they’re betting on the long side now. With market history as an indicator and the tendency of sentiment gauges being contrary indicators, the bullish party may be over soon. My experience with this indicator is that it tends to have about a one-to-two week lead time before the market reacts. In the present case, the market should top out in a week or two according to this indicator.
STOCK MARKET STRATEGY FOR AUGUST 7, 2016: The stock market followed last week’s scenario and is now in a position to make new all-time highs. The internal market is not overbought so that any strength can continue for another week to 10 days without triggering much of an overbought signal. However, if new highs reveal widespread weakness in the general market, it would provide a good opportunity to move to the sidelines and wait for the next high-percentage set-up.
Key underlying short-term market indicators show the following:
***********
THE BOTTOM LINE: Last week I wrote the following: The stock market has been chewing up time and consolidating its gains from the Brexit lows. The internal indicators show that the general market is within reach of oversold readings. This presents an interesting situation where the price levels would appear to be too high, but the internal market shows that it’s getting set up for more upside. At the very least, I’d expect a retest of the previous highs and show us clues of either strength or weakness.
That has panned out pretty much as expected. But where do we go from here?
We are right near the area of the previous highs and new highs are certainly likely given the fact that a moderate oversold condition was achieved only 2 trading sessions ago. So timewise, the market can continue upwards for another week or two without become overbought. So resist the idea of going short and let the market show us whether the new highs are achieved with strength or weakness. Then you can determine if is a “bull trap” or not.