Fear & Greed Index & more

Courtesy of CNN/Money

Courtesy of CNN/Money

As you can see in the chart above the stock market has entered an area of extreme greed where several tops or highs have occurred.  It does not mean that one will occur now or at this level, but, the probability is better than if the stock market was in an area close or closer to extreme fear.


On Sunday February 21,2016, the post, What's Picasso Saying, made the following statement.

What's Picasso saying ?

Picasso is not displaying any swings going forward for the DJIA.  So it is not easy to interpret a near flat line with an upward bias.  But, GE is the only stock left in the Dow30 that is one of the original DJIA stocks.  Although the price charts of GE & the DJIA are not similar, their changes in trend have been similar in the past.  Due to this similar trend between GE & the DJIA, it is best that Picasso's readings for GE be used temporarily as a proxy for the DJIA. So here are those results.

Hindsight has 20/20 vision, but, the comments highlighted in BLUE on February 21st could not have been any clearer at that time.  Looking at the DJIA chart today you will see a gradual rise since that time.

So where are we going from here?  The short term and intermediate term cycles are both suggesting a mid year pullback.  The short term cycles suggest a high late April - early May and the intermediate term cycles suggest something very similar.  What is interesting here is the Election Year Pattern shown many times on this blog also suggests a similar market direction as the cycles.  For those that have not seen this chart, here it is again.  This chart shows a high in early April and a low in late May.  Although this is about one month earlier than the cycles, it is still very similar.

Courtesy of www.chartoftheday.com

As we get closer more updates will be made.

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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