Too much bad sentiment?


A former employee came by today and told me that she was transferring her retirement account out of the stock market.   She just did not want to watch her balance decline any more. This is someone who does not typically follow the market.   When I consider her remarks in the context of all of the technicians who think this market is going to decline, I wonder if the market is misleading us, yet once again.   My longer term weekly indicators remain down, but my short term indicators have strengthened.   I have stayed away from this market because my rules require that I   trade consistent with the weekly trend of the market. But remember, every longer term weekly   up-trend shows up first in the daily trend. I would still like to see a GMI of at least 4 before I go long.

4 thoughts on “Too much bad sentiment?”

  1. There definitely is a lot of negative sentiment out there right now and rightfully so with the recession that began in late 2007 still fresh on people’s minds. However, I think its truly deserved when taken in context with current conditions that the government is controlling. 2011 will be a huge snap back to taxes pretty much all across the board while unemployment can possibly still stay high.

  2. Some of the articles that talk about a technical pattern suggesting the market will move lower is emerging as an Elliott Wave. Can you speak on this pattern and its viability? (since I believe the idea was developed during the Great Depression)


  3. It could be that, looks more like a classic head and shoulders to me…right shoulder neckline at about 2150 on the nasdaq. I’m not positive about that though because that line has been broken once before the recent bounce. The new line might be lower now.

  4. Professor,
    This is obviously 20/20 hindsight but Intel’s surpise numbers for this past quarter were followed by some pretty weak price action (this goes for JPM too). Did you use that info in your strategy?
    I hope you are having a great summer,
    Ben R.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.