Tag Archives: market sentiment

Bear Market Meter is Running

By Elliott Wave International

The Bear Market Meter is Running

Taxicab medallions and margin debt: A similar reversal in the making

As a native New Yorker, I can say with complete confidence: It’s true; there’s no place on earth like The Big Apple. It’s also true that, until recently, most New Yorkers would trip a nun if it meant hailing a Yellow cab first.

Fact is, the NYC Yellow cab used to be the hottest commodity in the five boroughs. When you needed a ride, spotting a cab with its service light on was like finding the last pair of Manolo Blahnik shoes in your size at a Manhattan Sample Sale.

But those days are over in NYC (and nearly every major U.S. metropolis). In the past year alone, street hail vehicles have suffered a series of crippling blows — including plummeting demand, fleet changes, sliding medallion values, and the “Taxi King” himself — Gene Freidman — filing for bankruptcy.

Continue reading Bear Market Meter is Running

Sentiment Viewed Another Way, Small Caps

By Biiwii

A feature of the current sentiment backdrop is that people seem to be looking for market indicators (reasons) to be bullish as opposed to bearish.  I mean, if you watch this site you know how keyed I am on the Semiconductors, as they were a post-2012 market leader.  They led into the August correction and led right back out of it.  Yey, everybody’s bullish on the Semi’s!  Woo hoo!!

But why are we not hearing about another post-2012 leader, the Small Caps?

Here is the weekly view of IWM.  Why is the rebuilt bull backbone not factoring this?

iwm weekly chart, small caps

Sentimental Pictures

By Biiwii

Let’s look at some pictures of what was formerly a totally bombed out market sentiment backdrop.

From Market Harmonics a look at RYDEX fund sentiment, fully recovered from the August freak show.  Notice how volatility has expanded since Central Banks started becoming more aggressively intertwined with markets since 2011?  Hmm?

rydex, market sentiment

From Doctor Ed by way of Investors Intelligence, a look at the II (newsletter writer sentiment) as of October 20, a couple days before Amazon, Alphabet and Mr. Softie launched the good times, good feelings and presumably the need for the newsletter boyz to adjust to being ‘right’ with the market.  As we noted in #366 this week the bulls were recovering nicely but the bears got a little too eager too soon, holding the ratio down.

Continue reading Sentimental Pictures

NFTRH 366 Out Now and Available for Free

By Biiwii

nftrh 366Do not subscribe to NFTRH!

At least not yet, anyway… I am going to release it publicly for the first time in probably 5 years.  Coming at what is a key juncture in most markets (talking the next 2 weeks), it seems like the right time to get this view of the current multi-market status out there before a wider audience.

NFTRH does not make predictions because they flunked me out of guru school and took away my crystal ball.  But we always follow the analysis and probabilities and intuitively self-correct in real time if/as needed.

NFTRH 366 lays out the parameters of this key, potentially pivotal time in global markets.  Generally, we have been right on the market’s turns ever since it resolved into the August drop and finally, things became ‘in motion’, which is the best environment to gauge and plan.  Right now the motion is ‘up’, exactly as expected.

If you would like to have NFTRH 366 with no commitment and no strings attached, simply email me at gt<at>biiwii.com or use the ‘Contact’ link above and request so.  If you find it is right for your needs I would welcome the opportunity to be among your market intelligence service providers going forward!

Market Sentiment Reset

By Biiwii

First headline I saw at Marketwatch this morning:  Why a fanatical run higher may be shaping up for stocks

First headline I saw at CNBC this morning:  Fear of ‘missing out’ will drive markets: Technician (click image for article and video)…

cnbc, stock market rally... market sentiment reset

[edit] The guy in the video is actually rational and echoes my thoughts on Biotech at the time of the liquidation.  The lady is a little more crackish; another chartist heard from…

NFTRH 365 Market Sentiment Bottom Line:

“Folks, the over bearish backdrop that was a big concern for bears not even a month ago is being eliminated.  The stock market bounce is doing its job.  While SPX continues to target the 2020 to 2060 range (with an outlier possibility for 2100 +/-) the backdrop is now one of rising risk to the sentiment bounce rally.”

Here is but one of the indicators we used to support the above, Sentimentrader‘s Smart/Dumb money data graph.  If you look closely, you’ll see that aggregated dumb money has aped the bottom and bounce in the S&P 500.  Now we are poking up into the target range with the media telling newly greedy investors what they want to hear again.  Well, they were doing that in August in September as well, but investors wanted to be fearful back then.  Not so now.  The bounce is doing its job.

market sentiment, smart money and dumb money

Post-FOMC Minutes Clown Show

By Biiwii

[edit] Aside from the market talk and very real view that declining confidence in centrally planned policy is key to coming market events, this post is for fun. Jeez, lighten up.  I know some readers just adore centralized policy making and interest rate manipulation, but the Fed has proven already that it does more harm than good.  The “Great Recession” doesn’t happen without the policy excesses that fomented it. 

Going on 7 years into an economic recovery/expansion, blaming global sources while seeing deceleration in domestic manufacturing, exports and now, payrolls after not normalizing by even a crappy 1/4 point?  Yeh, that’s just peachy.  I am all for being bullish if that is what is on tap.  Bad policy does not mean stock market bearish on any given time frame.  But it seems that Fed apologists have very constricted time frames by which they frame their views.  There is a thing called a big picture and it is littered with negative symptoms of centrally planned economies, both in the US and world-wide.

I am not advocating a Luddite-like return to bartering or even the gold standard.  I am simply saying that constant policy intervention is a sign that something is not right.  This is a global situation, but speaking of the US, which is my home, this chart says all it needs to say.  A large distortion has been bred into the market by abnormal policy.  This could prove very bearish or hyper bullish.  We just don’t know yet.  It’s all just prices and asset appreciation, after all.

irx and spx

Thus ends this [edit], which went on 10x longer than anticipated.

Almost as entertaining as the market’s reaction to the event itself is today’s reaction to what a bunch of clowns pretending to be in control of the economy had to say about the economy and by extension their policy supposedly governing same.

Market participants, black boxes and substance abusers alike might want to keep a couple of things in mind; 1) inflammatory news events are fleeting in their effects (and look at how quickly the gold sector, one standing to gain from a weak economic backdrop and its implications for policy, head faked up and reversed down) and 2) after the FOMC Minutes release in September the market cheered and zoomed higher after the Fed punted.  It then immediately reversed into a downside leg that became the bottom re-test.

Basically, the same dynamics are in play.  The economy is starting to suck wind, rate hike hype is fading and for the moment the market is choosing to see this as positive.  Just like it did for the moment in September.  Maybe it’ll be different this time.  Or maybe not.

Continue reading Post-FOMC Minutes Clown Show

Tinder Box

By Biiwii

tinder box to ignite stock market sentiment rally?We have been using the Tinder Box theme in NFTRH lately.  As in, stock market sentiment is so bleak, so depressed as to be a Tinder Box with the elements to ignite a flame that bounces the market, to clear the over bearishness at least.

We  have successfully followed a plan every step of the way… 1. down from the August breakdown, 2. up on the bounce to SPX 1975 or 2040 (hit 2020) and now 3. down to a test of the October 2014 / August 2015 lows, which is a decision point between a bounce or an entry into a bear market (by making a lower low to October 2014).

We arrive here amid an over bearish sentiment backdrop that is all out of whack with what has actually just been a twitch by the market in the big picture (with bull parameters still intact).  So whether this is the bounce, as it seems to be – and we are getting some follow through despite the volatility – or it comes from a lower level, it is going to happen.

There were the small speculators way too short the market and Investors Intelligence data showing newsletter writers having totally abandoned the trend they rode for eons (well, since 2011 anyway).  They are now advising extreme bearishness to subscribers.  Here’s the latest graphic on that, courtesy of Doctor Ed and the Daily Shot.

Continue reading Tinder Box

US Stock Market: End of the Complacent Era?

By Elliott Wave International

Stock market bears have been conspicuously absent

Editor’s note: You’ll find the text version of the story below the video.


August 20 was the third consecutive down day for the Dow Industrials as the index tumbled 358 points.

The US stock market had managed to hover near record highs, even as other markets (oil, precious metals, housing) had long since fallen from old highs. The 34-year bull market in 30-year U.S. government bonds ended months ago.

The prolonged optimism that created the Dow’s biggest triple top in 150 years may finally be flagging. The just-published August Elliott Wave Theorist says “an era of complacency is about to come to an end.”

Theorist subscribers are also reading about Fibonacci time and price relationships that appear to spell trouble for the Dow’s six-plus year uptrend.

This chart from the June Elliott Wave Financial Forecast [wave labels available to subscribers] also anticipated the stock market’s recent weakness:

us stock market

Long-term bearishness is virtually absent. The chart shows a 30-week average of Investors Intelligence bears (inverted to align with prices) plotted beneath the Dow Jones Industrials back through 1966. Bearish advisors contracted to just 14.9% in late May, which is the lowest percentage of long-term bears since early 1977 … .

In April, total assets in Rydex bear funds fell to $130.9 million, the lowest monthly level in 15 years.

Other indicators had reflected the market’s deep complacency. The S&P 500 recently went 129 days without a single-session decline of 2% or more. And on June 19, the VIX open interest put / call ratio (indicates the ratio of investors’ open option contracts betting on a VIX move) dropped to 0.248, its second lowest level since February 16, 2007.

On July 15, this headline published on NASDAQ.com:

Huge Second Half Rally Coming for Stocks

The August Financial Forecast provides another perspective on investor complacency:

In July, it reached a remarkable new extreme as bulls used complacency itself as another excuse to buy stocks. “The failure of the Greek standoff or the China stock market tumble to rupture global markets or drag down economic expectations has led to a rapid draining away of anxiety,” says a major news site.

Sentiment extremes are important because markets tend to turn when most investors least expect it.

Read Prechter’s entire August Theorist — FREE

If you invest in U.S. stocks, please stop what you’re doing, sit down and pick up Robert Prechter’s Aug. 19 investment forecast. Prechter published one of the most widely read investment letters of the 1980s, and he remains one of the most widely known market technicians in the world. On Aug. 19, before the latest spike in volatility, he warned of “pandemonium in the stock market” and a “stunning decline in US stock prices.” Now you can read his complete, subscriber-level report that predicted what you see today.

Click Here to Download Prechter’s 10-Page Report Now – It’s FREE >>

This article was syndicated by Elliott Wave International and was originally published under the headline (Video, 3:11 min.) U.S. Stocks: End of the Complacent Era?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

NFTRH 360 Out Now

By Biiwii

NFTRH 360 does a 360 all around the oh so highly anticipated FOMC ‘decision’, talks a little about the accuracy of professional economists’ recession predictions and talks a lot about the US stock market.

Playing it straight, we update the market’s long and short-term technical status and get more slanted in reviewing why this is not an organic stock market bull or economic recovery.

We cover most of the other usual suspects as well, including global stock markets and a clear view of the gold sector, which made a ‘Hammer’ on Friday, can bounce, but is giving a couple of concerning sentiment signals.

NFTRH 360, another in a long line of quality market reports, is out now.

nftrh 360