StreetSmartPost

Was the market’s down week of any importance?

An excerpt from StreetSmartPost by Sy Harding
 
Saturday, September 13, 12 noon.
The market’s winning streak paused this week. It confirmed the short-term sell signal triggered by our technical indicators.
But is it of any importance beyond the short-term?

It probably depends on where we are in the investor sentiment market cycle, and when we get the next short-term buy signal.

We can pretty much know from the extreme bullish sentiment readings of the VIX Index, Investors Intelligence Sentiment Index, put/call ratios, record margin debt, and so forth, that we’re at least somewhere between the ‘thrill’ and ‘euphoria’ stage.

But if we’re already at the euphoria stage, how big a short-term pullback so soon after the recent one would it take to perhaps move the cycle on to the ‘anxiety’ stage?

That would not be good.

But we can know that the large Wall Street firms that dominate the trading with their program-trading activities, especially in the final hour each day, will do all they can to encourage buying the dip. They are well aware of the importance of preventing a slide down through the other stages of the cycles.

The problem is that, with 25 bear markets over the last 114 years, or one on average of every 4.5 years, they obviously don’t always succeed.

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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 
Past performance is not indicative of future results