This week’s sentiment data reveals that the majority of investors are in the neutral camp and until the number of individuals in the bullish camp surges past the 65% for weeks on end, the idea of a crash is just a myth.
This market falls into the insane category as well, and that is why we have been focusing so strongly on the trend indicator and market sentiment. Technical analysis comes in at distant a third. Insane individuals have been known to do the unpredictable, and this applies to this market. It has defied all expectations. As a further precaution when our key Technical Indicators on the monthly charts of the DOW, SPX and Nasdaq experience bearish crossovers we will take a more defensive posture.
If one reading is displayed only; it means that we have averaged the readings for that month.
Strong Corrections and Crashes are triggered by Bullish Readings
The masses for whatever reason they have refused to embrace this market and until they do (something we have been saying for years on end) the markets are destined to trend higher. All strong pullbacks should be viewed through a bullish prism.
First posted at the Tactical Investor