Last week I ask….”Where did the Bulls go?” Reflecting how bullish sentiment had dropped off ton of late per the chart below. (see post here)
CLICK ON CHART TO ENLARGE
The above chart reflects that a large percentage of investors have become doubters about the markets of late. No tool is always correct, yet as I shared last week per the chart above, (see post) if history was any guide, sentiment at these levels suggested that we were closer to at short-term low than a high.
Today’s rally doesn’t a trend make…yet the situation below might suggest a little staying power could be at hand.
Are stocks and bonds facing a “key fork in the road?” Sentiment might not be all by itself, per suggesting a short-term low could be closer than further away…see below!
CLICK ON CHART TO ENLARGE
The above chart reflects the majority of the time … when bond prices fall, stocks tend to rally!
With bond yields facing key resistance, the 500 Index on short-term support and so few of bulls showing up in the sentiment polls, the 6-week trend down is going to take a break!
It was these conditions that led to the suggestion yesterday, that investors should start picking up defensive ETF’s that were on support. (see post here).
Ironic that TLT is down almost as much as the 500 index is up today!
cjk…High yields and PFF are acting ok today. We scaled back on high yields, yet long-term EMA lines still have us exposed to these products.
Andrew….anything is possible. This sounds strange, yet I feel the tool to follow is a certain metal. Premium members will use this metal as the key to many positions going forward.
I see that short term support at hand for stocks, but is it possible that stocks move higher without commodities (bearish patterns)?
Was wondering if you were going to acknowledge that support line for the 500. The market could go sideways (up and down within a channel) for a while. Own PFF. The fed would spank the big banks if they let the market crash.