It seems like market is making itself ready for a final turn lower, to put in the low for the current decline.
It is just very hard to believe that market turned up the very same day, it officially went into the bear market territory. A lot of people tend to exit the market on the close in the bear market territory. Therefore, if the market can close under 1090, it would trigger a lot of sell signals which will in turn mark capitulation.
On the sentiment front, we are getting extreme pessimistic readings which are conducive to a sharp rally. For example, Investor Intelligence survey dropped down to level of Bears last seen in March 2009. Although this is significant pessimism, it is difficult to assimilate that market bottomed on the same day pessimism hit an extreme level. Typically, markets tend to remain oversold for some time. In this way a lot of participants, who trade based on sentiment measures, assume that market has further to decline.
Overall, we are likely to see a new low over the coming weeks. Actual critical levels, market timing and Market Matrix analysis will be shared with subscribers. However, we will keep this blog updated as we see critical developments.
Note: We are in a bear market/ downtrend, and rallies will typically fail in a bear market. Therefore, we will not buy this rally until unless our proprietary indicators give a buy signal or the trend is changes.
It is just very hard to believe that market turned up the very same day, it officially went into the bear market territory. A lot of people tend to exit the market on the close in the bear market territory. Therefore, if the market can close under 1090, it would trigger a lot of sell signals which will in turn mark capitulation.
On the sentiment front, we are getting extreme pessimistic readings which are conducive to a sharp rally. For example, Investor Intelligence survey dropped down to level of Bears last seen in March 2009. Although this is significant pessimism, it is difficult to assimilate that market bottomed on the same day pessimism hit an extreme level. Typically, markets tend to remain oversold for some time. In this way a lot of participants, who trade based on sentiment measures, assume that market has further to decline.
Overall, we are likely to see a new low over the coming weeks. Actual critical levels, market timing and Market Matrix analysis will be shared with subscribers. However, we will keep this blog updated as we see critical developments.
Note: We are in a bear market/ downtrend, and rallies will typically fail in a bear market. Therefore, we will not buy this rally until unless our proprietary indicators give a buy signal or the trend is changes.
For Subscription Info (if Subscription opens up in October), please fill out the following form:
Thanks for this update. I thought tuesdays end of day rally had something to do with the plunge protection team. If they were trying to keep the market from closing above 1090 that makes perfect sense. They just needed to kick off a short covering rally.
ReplyDelete10 days since the last update?
ReplyDeleteHad some internet related issues. Just posted a market update.
ReplyDelete