The most accurate measure of Stock Market Sentiment is the Daily Index Sentiment©Published here by the W. B. Busin Group.
September 28, 2009 2200 EDT / 0200 UTC As we stated on Friday, "It was a dull session. It is written, "Never short a dull market." Let Monday show why that is true." Monday showed why it is true. What does Tuesday and the rest of the week have in possibilities for trend, or direction or possibly a reversal? If the correction is over, then higher is the obvious direction isn't it. We try not to repeat it too often, but the USD is a primary player as it has been for weeks. Watch it. In our view, it looks tired and may rest in a consolidation phase. For September 25, 2009 2130 EDT / 0130 UTC First a comment about the graphs. Price of the NYSE is overlayed on the daily sentiment indexes. The sentiments and NOT the index is related to the bullish bearish levels. When daily NYSE price moves above or below the scale of the graph's left axis, we simply adjust the axis to scale. Some have mistaken price level to be bullish or bearish based on the scale related only to the sentiments. For example, today's closing NYSE Index price is coincidently, below 80 but should be considered quite bullish for the next session (Monday) until proven different. We will have a brief summary composed if there is interest and send it out in email form. If you are interested in such an email or website membership site format, we have much more to offer as sentiments from other US and foreign indexes. It costs a wee bit to have data collected and worked, entered into the algorithms and then entered into graphs, by someone on staff. If interested, or just curious, we will mark up a email signup and proceed from there with information about any future service. --------------------------- Daily Index Sentiments today were gently lowered into the bullish zone. The potential rally for the B of an ABC corrective may have begun late in the session. Structure remains intact as price level support has held at necessary levels. The sentiments and technicals reveal an apathetic bearishness, but no fear as volumes and pointer blocks of sessions have bought some of the retail selling. It was a dull session. It is written, "Never short a dull market." Let Monday show why that is true. Don't forget to return to check the mid-session and late session projections posted in the block above. Come back Sunday before Sydney opens, for the email signup. And refer a trading friend here, from a forum or chat room. Just post the link possibly. Thank you for coming here from all corners of the globe. Thousands return everyday.
September 24, 2009 2015EDT / 0015 UTC Supporting volume and technicals are holding indexes just above critical bullish support levels. The daily index sentiments have reached toward the bullish zone and technicals may support a retracement rally for the session. The closing are the counter risk - either up or down. Corrective structure intact - an A today and a B tomorrow; C next week. September 23, 2009 1700 EDT / 2100 UTC We expect the daily index sentiments to move faster toward the bullish zone and then bounce around in the lower half of the graph this week. Today's afternoon negative volume patterns grew in intensity and finally collapsed the weak rally from the FOMC announcement. That is why we do post the midday and late afternoon data point result that project the daily number under the condition, "if data_ends now" parameter. The three weak pushes this month to the 80 level, by the market sentiment indexes, finally repelled firmly and price began to follow quickly. We expect some upward retracement tomorrow and then a downward resumption for index prices. The short term low for the USD that we have been looking for appears to have been made. The daily USD can take a technical bounce and then return toward the current lows to coordinate with the next move upward for the indexes. Next week likely brings a further test of support levels intraday with daily closings ratcheting back in the final hour toward the middle of the daily trading spread. The corrective is not likely to test the early September lows, but that is not a certainty. Just unlikely. The resumption of the upward trend is likely close at hand, after a few sessions of downward plunging to encourage some fear back into the market participants For September 22, 2009 1800 EDT / 2200 UTC The daily index sentiments have returned to the edge of the bearish zone for the third time this month. The potential for continuation upward is available and set in a temporary high this week. The other alternative is to zig zag laterally in an upward biased channel, A lot of risk and modest reward is not our favored exposed position. A patient cash position may be best until the FOMC announces its view on current monetary policies and its expectation for near term inflation. September 21, 2009 1900 EDT / 2300 UTC A brief corrective is underway and may end quite soon, and return to brief new highs tomorrow or later this week, as we mentioned before. A lateral may be the corrective track and may hold the entire corrective phases. Then a larger corrective may begin toward month's end. September 18, 2009 posted Saturday The daily sentiments indexes have remained in the upper half of the normalized range for over two weeks. It appears that the final upward leg will be delayed by a potential lateral corrective into the FOMC meeting next week. The potential for a downward price also remains just as likely as lateral corrective. We don't view the upward move as over, as many would like to believe. There is more upward price movement ahead in the coming weeks, and then, a short term and intermediate term high will be set in. September 17, 2009 2100 EDT / 0100 UTC We experienced a data corruption error that delayed today's posting. We expected and got the flat version of a pullback in a very narrow spread. The daily index sentiments have declined back into neutral. The temporary end to the upward move is nearby but not complete yet. Tomorrow's action will likely complete both Dow and SPX lower degree internal structure to begin a more sustained and higher degree phasing, The corrective may be more than we expect today, but we will know soon if it will last longer than the end of the month. Time to be careful and watch for the USD break, up or down! September 16, 2009 2000 EDT / 2400 UTC The market sentiment indexes are back to the bearish zone. This rise toward bearish may only result in a brief pullback or flattening for index prices, while sentiments over react downward or the more likely continuation further into the bearish zone for another session. September 15, 2009 2100 EDT / 0100 UTC The neutral zone tracking is definitively supportive of trending. The daily sentiment indexes are now at or approaching the overbought zone. To add a dash of uncertainty, the upward slog is at significant resistance during a quadruple witching expiration week. Even more, quadruple expiration in a September of a steep bear market rally. Any downturn will key off the USD, which has the appearance of ''need to rally'', and soon. The sentiments will spike within 2 or 3 sessions, down to oversold/bullish. It will make the buy then, a wee bit more difficult. And, it could well return to neutral there for more than a few sessions. How the indexes continue this bullish move is likely the way most bullish moves proceed. That is with the fewest possible people participating on the significant upward moves. Time to be careful and watch for the USD break, up or down! September 14, 2009 2000 EDT / 2400 UTC We expect the sentiments to remain in neutral tomorrow. The indexes are in final stages of a triangle for this phase of the rally. As we stated on Friday's data, the neutral zone allows for trending. If the indexes continue lateral tracking, the break to the downward side may be set off by an outside event or data release this week and be even briefer (1-2 sessions). September 11, 2009 2300 EDT / 0200 UTC If you have viewed these graphs regularly since we began publishing them in April, then you can probably look at the current graph and know what two or three paths to anticipate for the track of our daily market sentiment measures. You can also likely "see" the choices for the index prices to track next week. It does not take much time to learn the value of these sentiment indicators, especially when volumes on index and stock trading have contracted dramatically in recent months. The smaller volumes have created opportunities big funds/big money/smart money to move price (stocks, indexes, futures, ETF's, etc.) with very little effort and very little volume. As for the coming sessions of the week ahead, we expect a downward track, and, possibly, a significant but quick corrective. The other choice may be another lateral corrective with a downward bias. The latter choice may be how it begins, thereby keeping sentiments above the bullish zone for a session or two. Next week will be interesting as quadruple witching expiration week begins with its usual bag of tricks. September 10, 2009 2020 EDT / 0020 UTC The rising prices of the indexes with sentiment turning downward presents two choices for price and sentiment tomorrow. Index prices may move slightly higher and then close lower with the daily sentiment indexes. Or, index prices could turn downward and begin a short term correction with the daily index sentiments dropping into the central part of the neutral zone, 50+/-. A lower probability is an intraday upward spike for price and the market sentiment indexes into mid session and then to proceed on a lateral track for the session. As usually mentioned, the downtrend of the USD has grown old and is likely on its last legs. A reversal to up for the USD will be felt immediately in the US indexes and likely the FTSE/DAX as well. We watch it each day, all day. Our extreme target is just above 75 USD Index, with 76 level as better probabilities. September 9, 2009 1800 EDT / 2200 UTC Stock market sentiment is quite often a part of good signals a short term high or low. We may indeed be quite close to a short term high. Our recommendation to watch the USD by using the various currency crosses, i.e, EUR/USD, or the U.S. Dollar Index has kept the proper perspective during several excited sessions for stock market indexes, petroleum products and now the precious metals. We continue to expect higher index prices in coming weeks as our weekly sentiments indicate and until the USD does indeed make more than a short term upward move. September 8, 2009 1800 EDT / 2200 UTC Sentiments did turn a wee bit toward neutral as index prices displayed higher closings. The markets remain in upward bias but the upward price move may have achieved most of the trading move. Take profits quickly and losses even faster. September 4, 2009 1740 EDT / 2140 UTC Sentiments point toward an intraday higher high on Tuesday - an opportunity to sell. If so, then we would expect sentiments to return to the mid-neutral zone and then assist price to continue a rally after a few sessions. The upward trend has a chance to continue if sentiments don't spike with modest price moves. The alternate track available is a significant gap upward on Tuesday that reaches near new highs on a price spike. This would push sentiments into the bearish zone also. The gap may be expected if the USD continues toward 77 level, possibly 75 level eventually. The bearish view would call for an immediate decline off of this retracement high, expected on Tuesday. The correction for the indexes would likely fall to a 40% retracement of the entire rally from March 2009. So far, that is the least likely scenario but most expected by retail traders and in the media. A return of or a steady increase in general global market volumes will likely not occur this month until new highs are seen and the public begins to see that September is not going to crash. Unless the markets do begin the corrective crash. It is now up to the traders in the weeks ahead - do they want upward (the path of least resistance because so few believe it possible), or, do they want a big downward move and in turn fight the Federal Reserve's pledge to keep the markets stable with an armada of cash and liquidity? So, as Dirty Harry said, "You got to ask yourself one question. Do I feel lucky? Well, do ya [trader]?" ;) Trade what you see, not what luck may bring. Yes, we are flat. Monday, September 7, 2009 is an American holiday and the markets are closed.
September 3, 2009 1940 EDT / 2340 UTC We do see a hint of over reaching by our daily index sentiments when comparing to the modest index price rise. It is not unusual to see this kind of pop up from the buried extremes that sentiment had sunk to yesterday. Often after one of these very extreme reversals (from a high or low measurement), indexes will close toward the new direction but with a flatter sentiment reading (see July '09 lows). In this case, the upward direction may be modest tomorrow if the pre-market employment data gets a favourable reaction. Any negative reaction will be difficult to gauge if price sinks dramatically. By 0915 EDT (15 minutes before the opening), the futures may have settled in to indicate whether a positive upward move could potentially begin on Friday. Use stops as always on any open positions as any normal trader would according to risk management of their trading plan. September 2, 2009 1900 EDT / 2300 UTC The fear is nearly finished building its new big 'wall of worry', as the daily sentiment indexes indicate. The "whole world is living in fear" (Lightburn) of the next crash, it seems. We can soon be running up this wall to new highs. Then, at the top of the wall the fear will vanish and ecstasy will reign.
It's about buying the fear and selling the ecstasy. Then, buying is soon, then with the ecstasy, we will sell. Buy the wall, short the fall. Patience. September 1, 2009 1940 EDT / 2340 UTC The daily sentiment indexes dipped further into oversold/Bullish zone. Index prices have been suspended in air without any supporting volume to continue the current uptrend since August 21st. Technicals are now oversold in the extreme. Structure of the current up move from the July low may seem to be in danger. Many traders and investors are "measuring this bullish move from March for a casket". In our view, this pullback for the indexes in Europe, Asia and the USA is healthy, and dare I say it: Bullish! It just may not be bullish at tomorrow's opening, but it might be. If you were long at this morning's open in the U.S.A., you were likely happy and not prepared to be wrong soon after. Now, look at the FTSE, DAX and the CAC40. If you thought you had a monstrous day, imagine what their day was like. Sentiment indicators are incredibly important yet are but one tool in a trader/investor's tool box. So, we expect an upward opening tomorrow and a slog upward through the afternoon session. BUT, this corrective action is not over. But, price and technicals have now set in a baseline from which to diverge and continue higher in the coming sessions. We don't expect it to take too long to finish this correction. Just be patient and cautious. Sentiments will likely rise tomorrow with a higher closing but wait for all your "tools" to be ready for the next move upward. Finally, consider how very bearish everyone is right now. Tonight. Do you think they are right? Patience.
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We measure what investors and traders do, not what they think, say or feel.
The most accurate measure of Stock Market Sentiment is the Daily Index Sentiment©
Published here after each market session by the W. B. Busin Group.