- Daily Stock Market Sentiment -

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IMPORTANT Update below from September 19, 2015

October 17, 2015 (next regular update here)

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September 19, 2015

As we mentioned below, US and global indexes were all in a negative bias which soon resulted in a significant down move that borders on  setting up a bear market.  We view the decline as corrective and have compared it to the shape of the 1987 crash.  The low for the move occurred on the 28th anniversary of the high that precede the drop into the October 19-20, 1987 low.  The current recovery action also resembles the structure of the post-crash 30+/- trading days in '87.   USD has been in a similar recovery with US indexes following the dollar's direction.

We are expecting this corrective to consolidate or begin to rise into the 28th anniversary of the crash low - although a retest of the lows is a typical technical expectation.

July 24, 2015 Important Update 

It is growing difficult to find any industrial indexes with confirmed bullish trends that are not looking weak. The Nikkei may have one of the few positive weekly biases but it also is at a critical structural point - either retracement of the recent downward move, or a new leg higher to new highs. The IBEX and CAC are also possibly in similar mode of choosing which path to take - correction or new highs.

Two previous sets of occurrences of the Stretch and Reaction in deep extreme bullish zone on the same 2 consecutive days (like the last 2 days) preceded significant declines immediately (January 02, 2014) or, by a several sessions (August 28, 2014 and September 25, 2012). Another set that is very similar was the 2 days ending October 05, 2007. We are not inferring a big drop immediately or in a few sessions, we view this occurrence more as an alert to be ready for a near term move that otherwise be unexpected - maybe upward is still possible.

The straight drop for the past 6 sessions for NYA and RUT are disturbing at best, and only one session of flat effort at retracement back - not to exclude the obvious lower lows and lower highs for NYA since May.

One of the few negative (non-bullish) scenarios and structural phasing potentials is a sequential rollover of the indexes into a Primary 4th phase. In fact, it may be happening to the NYA right now and, a bearish leg down in a C of A leg is at hand for RUT - just a few dozen handles away from confirming a track to RUT 1140 and much lower after that.

"July 13, 2015 1530 ET - ....... Structure leaves only a few non-bullish alternatives as SPX targets the 2138 level to confirm - but may not get that far before the timing window opens on July 15th "

The question for SPX is can it reverse from near Friday's lows, and, then proceed to take out the 2138 level, that we have too often repeated as necessary, to indicate higher structural advances consistent with a bullish Intermediate 5th phase of this long Primary 3 that began at October 2011 lows. So, if SPX does not reverse higher and exceed 2138 on close by the next significant timing point on July 31st, then we will begin to assume that the next few months will have bearish bias and a corrective structure.

If it cannot mount such a rally then the most prominent SPX targets below are 2012, 1954, 1882, perhaps a spike to 1871 but if it does not hold then 1838 could be the low of the first move down of Primary 4th.

That is our preliminary scenario for any continued drop through FOMC and beyond. We will allow for some flexibility since 4th phases are not always amenable to forecasting their lengths, structures, timing or endings.

June 02, 2015 Update 

You can see the drama in stock market sentiment delivered by a 35 handle decline for SPX last week. It has not resulted in a big reversal since it has not reached for the extreme bullish zone. In fact, on daily comments we expected an intraday re-test of SPX 2000 level and a 2098 gap closure - got the re-test, but gap still not covered.

USD upward thrust has taken a dive after a 62% retracement rally. In a week of numerous data releases including NFP, traders and investors are dumping $ denominated assets defensively, especially in view of the FOMC meeting in two weeks.

Daily Sentiment for Week ending June 02, 2015 (updated periodically)

Previous Updates -

January 06, 2014 Update

Sentiments have again offered proper signals through another year of market action. The year of 2014 is more likely to have a solid correction for the indexes and could well begin in the first half of the year.

Following that multi-month corrective move, the bullish move and trend should resume with conviction into a high that will be followed a much more significant correction which could last for a year or two. We infer from the structure that the more significant correction is likely to deeper than many investors will expect. The depth of the correction is likely to be accompanied by an increase in speed downward. This speed and depth is likely to scare many investors who have only recently returned to the buy side for stocks after taking some downward moves in the debt markets.

We have been negative on debt since 2012 highs for prices (Treasuries) and have not been disappointed. This bearish bond picture is across the investment timeframe outlook - as in, for the next 30 years at a minimum. The opposing bullish picture for equities follows on that bearish view for debt - as in, a 30-40 year mega Bull market. We have mentioned the bear Bond market and the Bull market for stocks several times, but neither are straight line moves. Each will have corrections along the way some more dramatic than most. A basic structure underlies the upward trend with higher highs and higher lows.

Target levels for stocks are a bit easier than bonds in a "managed interventionist" global economy. Long term, we expect the Dow to reach at least 96,000 before the final top is set in. Treasury bond prices eventually approach the 1984 lows, but meanwhile, first firm support for Bonds lies at 92-00. Current short term support is nearby at 125 half.

We remain bearish in the short term for metals and energy. As for the USD index, we expect the trading range to narrow a bit this year instead of the 7 handle range since early 2012.

See the recent Daily Index Sentiments graph posted below. Join us by signing up. We have several changes coming to the site and our coverages of traded issues.

 June 12, 2013 Update

The indexes topped out since our timing point date on May 22, 2013. The corrective has proceeded normally but without as much price decline as we still expect during the summer trading. We expect that a normal corrective for SPX would eventually reach at least 1555. Delayed daily index sentiment graph shown above. Daily updates for sentiments and trading commentary are inside. Sign up and then confirm in second email.

April 18, 2013

The 1937 'Crash' may be repeating or rhyming

We have discussed and analyzed the potential for a 'repeat' of the 1937 to 1942 market decline for months on this site. We have also commented and called for caution on the long side since experienced traders usually don't try to sell top tick.

The past few sessions have seen a pullback that has begun to take on a few characteristics of the initial move off of the 1937 high. We aren't calling or predicting anything, but structure, technicals and many economic/financial factors point to some similarity with the 1937 set up.

Some conditions may be different but the constant that has not changed is people. People remain vulnerable to the same sentiments and emotions that drive their investment and trading actions.

December 31, 2012

What is ahead for markets in 2013? 

We expect the bias to be upwards for indexes in January 2013, but with a frustrating slog. Modest sentiment moves will continue to be followed by brief moments of extreme changes in daily sentiment (see daily chart below).

We also expect that the move higher is also likely to rise into a potentially negative reversal downward that may follow a historical pattern for the indexes. If that scenario does develop, then the subsequent decline could become the big trade of 2013 and beyond.

We have discussed this scenario off and on, over the past several months, in our comments on the intraday market action. The most recent is on December 21st and is in the archived comments. Is it a prediction? No. We never predict. But the similarities and parallels in the current indexes and their individual structures is striking. Supporting this set of scenarios is the Federal government action and inaction.

Leaping toward a very negative scenario for the US and global economies is daft at best if relying on only a historical chart pattern. It is worth keeping tabs on how it tracks in the weeks ahead, but so far, it is spot on from the SPX and other index action in December 2012.

W. B. Busin Group Publishing

July 7, 2012

Market Timing and Market Sentiments: Bias is Down in August.

The looming turning points in our timing models are at hand. For a few weeks, we have discussed what these clustered timing points might mean in the short term and the longer term. The timing window for the timing clusters closes on Friday, August 3rd.

The nearly unprecedented clustering of Timing Points into one week are hiding the next significant move in the indexes. The ladder to the downside has potential of 2 or 3 rungs that are far apart, nearly 100 S&P 500 (SPX) handles for each. That would likely be 1,000 Dow points for every 100 S&P 500 points.

That targets S&P 500 levels of 1250's first, then the 1150's and likely the SPX level of 1049 would hold as support for the correction in the Bull Market. It could consume a few months to accomplish this correction. That would be preferable to a steep drop that consolidates for a bit, then, drops off a cliff again, etc.

Why is this coming? It is a factor of time, market structure, index sentiment, volume measures and the markets technicals that we track each day. If a downward move begins here, or we see a blow off top at slightly higher highs, we will remain short term bearish but longer term bullish.

Indeed this is a very bearish view. Just don't feel that you weren't alerted to this potential that may begin this coming week. Corrections are a part of market action. We trade them, whether intraday or in the larger timeframes.

The larger timeframe has the SPX and Dow Jones 30 indexes in a very big and long corrective formation that began May of 2011. Yes, it is not a straight down move, but an odd looking correction. But these formation frequently occur in the beginning of young Bull Markets, regardless of timeframes. (They are actually a quite bullish in the long term projections.)

The final leg down, as we described above, should produce an excellent long term Buy for just about any index or stock, domestic or global, for many decades to come. The end of this final leg down either stops just above the November 2011 or just below it. But we expect index prices to reach for those levels.

The Weekly Index Sentiment graph above, displays the proprietary algorithm that is applied to both daily and weekly stock market sentiment data with the weekly NYSE price overlaid on the graph.

Various of our Daily Index Sentiments are updated during each session and at the end of US trading.

Have a fine weekend.

W. B. Busin Group Publishing

April 27, 2012

We are focused on whether the current corrective off the early April high is over, or just about ready to begin the next leg downward.

That is, have we seen an A and B phasing with the C leg down to come? Is this a much longer term (weeks) lateral corrective, lasting into the late summer?

What about the "sell in May and go away" belief that many espouse? Well, look at the April and May action in 2008. Is that repeating here?

Is another European 'crisis' brewing in Madrid? Is France going to elect a big tax President who will spend even bigger? Will Bernanke continue to "lend" to the ECB if the USD strengthens into this summer?

The answers are going to have an impact on markets, domestic and international politics. If things get a bit fuzzy, just add one sudden strike on Iran's nuclear "research facilities". That should clear things up quickly.

Often, the biggest moves upward begin at seemingly the worst of times, ... March 2009, October 2002, December 1987 ... and so on. We are cautious here until a decisive direction takes hold, whether upward, downward or lateral.

Have a fine weekend.

W. B. Busin Group Publishing