Investor Sentiment Invalidates Stock Market Crash 2018 Hypothesis

Market Sentiment Does not Support Market Crash 2018 Propaganda

While, the action has been restricted to the upside, the same cannot be said for sentiment readings. For the past four weeks, the moves have been wild, and this trend appears to be gaining traction.  The number of bulls this week surged to 47%, and the number of neutrals and Bears experienced a sharp drop. Additionally, there was a sharp move in our anxiety gauge. Market Update Nov 2, 2017

Despite, all the tall tales experts like Marc Faber love to tell,  in reference to the coming stock market crash, there is no evidence to support these silly assertions. One of the most important indicators of a market putting in a long-term top is investor sentiment.  The Crowd is far from Euphoric so the markets are not going to crash. A correction though is a strong possibility as the markets are extremely overbought.

Try Something New In 2018 Instead of Focussing On The Crash Factor

The market has not let out a decent dose of steam for some time, but when a market is trading in the overbought ranges, it is generally prudent to wait for the market to let out a decent dose of steam before opening long positions in the major indices. The other option is to establish positions in stocks that are trading in the oversold to extremely oversold rangesMarket Update Nov 2, 2017

That is what we told our subscribers back in November and those views still hold. While the markets are overbought, investor sentiment is trading in the oversold ranges.  Most Investors have not embraced this bull market and until they do, it will not crash. Therefore all strong pullbacks should be viewed through a bullish lens.

Compile a list of stocks you would love to own at a discount. When the market’s pullback/crash jump in and buy them.  History indicates that the best time to accumulate stocks is after the markets have crashed or experienced a strong correction.

First Published on the Tactical Investor

This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
CONVERSATIONS