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From All Star Charts: I always find it interesting when markets hit new highs and bullish sentiment simultaneously drops. I realize there’s a lot of noise in these weekly AAII Sentiment polls, but it’s fascinating nonetheless. I think it’s really just the same old story of a hated market. The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, or neutral on the stock market over the [...] From Kimble Charting Solutions: CNBC broke the story two days ago that PIMCO’s Bill Gross was buying U.S. government bonds. Why does he like bonds now? Could part of the reason be the patterns and bond sentiment in the 2-pack below? The charts above reflect that bullish flag patterns in TLT & IEF could have formed and bullish sentiment is now at levels where prior rallies in bonds took place… Read full article (with chart)… From The Big Picture: I mentioned last week that bullish sentiment was getting a bit frothy. After a few weeks of record highs, expectations that stock prices will continue rising had surged. Not quite an extrapolation of recent trends into infinity, but getting there. This morning, I wanted to address the flip side of that — Bearish sentiment (expectations that stock prices will fall in the near future). This Pessimism remains above historical [...] CHART OF THE DAY: Investors Are Getting Really Pessimistic Despite the rally. In the wake of the Italian elections, bullish sentiment measured by the American Association of Individual Investors (AAII) plummeted from a high of 41.8 percent down to as low as 28.4 percent last week. Meanwhile, the Dow Jones Industrial Average continued its bullish march to an all-time high. This week, AAII bullish sentiment ticked up to just 31.1. This is well below [...] from Gold Money: Are the markets at long last taking central banks at their word? This would appear to be the conclusion to draw from the continuing bullish action in stocks and commodities, as well as gold and silver, though there remain any number of black swans circling overhead. The euro and Aussie dollar are gaining while the US dollar is losing ground to other currencies – sure signs of bullish sentiment. [...] by GoldCore Today’s AM fix was USD 1,726.75, EUR 1,350.71, and GBP 1,085.05 per ounce. Silver is trading at $33.07/oz, €25.94/oz and £20.84/oz. Platinum is trading at $1,576.50/oz, palladium at $633.80/oz and rhodium at $1,050/oz. Gold fell $4.40 or 0.25% in New York yesterday and closed at $1,727.20. Silver hit a daily low of $32.86, then recovered higher at the close [...] by Charles Hugh Smith from Of Two Minds Why QE May Not Boost Stocks After All What if the Fed throws a QE equity-ramp party and the fireworks fizzle? If there is one dominant consensus in the financial sphere, it is that the Federal Reserve’s $85 billion/month bond-and-mortgage-buying “quantitative easing” will inevitably send stocks higher. The general idea is that the Fed buys the mortgage-backed securities (MBS) and Treasury bonds from the banks, which turn [...] From All Star Charts: It’s hard for us not to be optimistic going into the month of August. Forget about all of the trendline breaks and multi-decade lows in bullish sentiment for just a minute and let’s just look at seasonality. Specifically, focus on the typical late-summer buoyancy in stocks during election years. According to the my trusty Stock Trader’s Almanac, the Nasdaq has returned an average of 2.7% and the Russell [...] From Kimble Charting Solutions: The U.S. dollar has been hot of late, as it has rallied over 6% in five weeks. Not only has the price of the dollar moved a good deal higher, so has bullish sentiment, as the number of people favorable on the dollar is reaching levels seldom seen in the past four years. If the U.S. dollar is about to cool off a little, it could start to cool at… Read full [...] The U.S. dollar is now facing a falling 10-year resistance line, and dollar bullish sentiment is almost reaching 80%. Despite these high bullish readings, if the dollar succeeds in a breakout, odds move up considerably that… Read full article (with chart)… by Lance Roberts of StreetTalk Advisors Risk Ratio Indicating More Correction Coming The current market correction should not come as a surprise to any one. There has been consistent and substantial evidence that the rally that began last October was unsustainable. We discussed the coming correction beginning in March (see here, here, here and here ). The question now is becoming whether the current correction is over or is there more to come? It always fascinates me to watch the [...] From Kimble Charting Solutions: U.S. dollar… Bullish sentiment levels are nearing 80%… At the same time, the dollar is back at… Read full article (with chart)… by thetechnicaltake
In the absence of extreme bearish sentiment (i.e., bull signal) developing, it is unlikely that any upward price move in the major equity indices will last more than a couple of days and it is likely that selling will resume once those prices move towards the recent cyclical highs. Having more bears than bulls at the start of a rally provides short covering fuel and buyers on the sidelines willing [...] by thetechnicaltake
The very erudite Dr. John Hussman is as good as a market researcher as there is, and he defines a set of market conditions that when they come together generally leads to poor equity performance. One of Hussman’s syndromes is the “overbought, over-bullish, overvalued, and rising yields syndrome.” My own research would agree this assessment. The markets tend not to do well when yields are rising and when investor sentiment is overly bullish. [...] David Levenstein says although gold prices remain range bound, prices firmed up during last week indicating a more bullish sentiment in the short-term.
Author: David Levenstein JOHANNESBURG - It was not that long ago when Greece was the main concern of global investors, but already most of us have already forgotten about that on-going saga. Now, the global financial crisis has moved from Greece to Spain, with Italy waiting to [...] by Gold Scents Today is a classic example of why I have been warning traders not to push the long side of the stock market. When these creeper trends finally break they often generate a crash or semi crash type of profit-taking event. The last 2 1/2 months were a classic example of why I have been warning traders not to short the stock market. These creeper trends can go on much [...] A couple of weeks ago, we compared the Bull market of Silver to the Nasdaq Bubble… We wrote that Silver could go as high as $38, but that that might be an inflection point. Below, you can see an updated version of the chart we posted a couple of weeks ago: Chart courtesy Prorealtime.com Sentiment is also getting (too?) bullish, as [...] From Bruce Krasting: It has been my observation over (sadly) a long period of time that when all of the “stars” line up and point in one direction, it’s often time to go in another direction. The commentary on the TV shows and newspapers is usually the last place one would go to for investment advice. The media is, however, a good place to consider if one was looking for signs that [...] What a difference a quarter makes: back in Q4 2011, in light of the imploding global economic reality, the only recourse equity bulls had to was to point out that corporate profitability was still at all time highs, and to ignore the macro. Fast forward a few months, when Europe’s economic situation continues to deteriorate with the recession now in its second quarter, China’s home prices have just slumped for a 4th [...] |
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