Disagree, sentiment is pointing to at least a short term top, with a possible move down to Dow 7,800. Let me explain: Trader bullishness is at 85% now vs. 2% on March 9th. At the tip top of the market in October, 2007 trader bullishness was at 89%! 85% is way too positive. Also bear markets end with PE ratios at 5-8. They were at 12 in early March. Watch the XLF (which was up a few pennies); if this index breaks below $11.25, it could dip to $9.40 taking the market with it. I still think we could see Dow 9,500- 10,000. A test going below 6,500 could occur this fall or next year. Trading is never easy, and there are many head fakes.
6 comments:
allan push up, or did you mean down? cant believe mkts down and faz is flat.
rob g
Or it could be a simple consolidation pattern prior to higher prices. If it were this easy, anyone could do it.
Sentiment is no where near ready for a top. Not even close. Its going to take a lot more time before we get a correction in this bull market.
Two important things that traders must never forget:
1) Dont fight the fed
2) The trend is your friend, and, you guessed it, the trend is up.
Disagree, sentiment is pointing to at least a short term top, with a possible move down to Dow 7,800. Let me explain: Trader bullishness is at 85% now vs. 2% on March 9th. At the tip top of the market in October, 2007 trader bullishness was at 89%! 85% is way too positive. Also bear markets end with PE ratios at 5-8. They were at 12 in early March. Watch the XLF (which was up a few pennies); if this index breaks below $11.25, it could dip to $9.40 taking the market with it. I still think we could see Dow 9,500- 10,000. A test going below 6,500 could occur this fall or next year. Trading is never easy, and there are many head fakes.
Remember you counted current counter trend wave as wave 4 of primary wave 1 and wave 5 might have started since 5/8.
Did you change your wave count?
This has got to be the longest wave 4 in history! Perhaps instead its primary wave 1 up with wave 5 already completed in early march.
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