monday brainstorming

1. This week will be volatile to both sides which is indicated by plenty different aspects. First of all we are quite oversold short term and have almost reached our near term target of 1245/50 . Second point is the total Lunar eclipse in Sagittarius in contrast to the Solar eclipse which started the sell off on 1 May together with Neptun going retrogade one day later – we have  now a Saturn going stationary and direct again which should mark the end of wave 3 down give or take a few days in combination with the Solar Eclipse.

I see two scenarios optional to each other how the market plays out in both we ultimately will go lower – the difference is rather the short term upside potential. In scenario one we have a brief rally to the 1290/1300 level within 2 weeks before dropping lower but the shorter the recovery the less the downside potential gets for further declines. 

In the second we play out a Head and Shoulder like price move as the 1250 level in broad terms might serve as the neckline tested this week and again in 2-3 weeks wave 5 down and fail to make new lows triggering a recovery up to the 1330-50 level for another 4-6 weeks before a drop to our 1150 target should follow. This is all within 2011 longer term the picture looks even worse.

Short term plenty sentiment indicators have dropped to oversold levels and some are rather bearish which supports the assumption that a bounce is due starting some time this week or early next week.

excerpt

MONDAY, JUNE 13, 2011 Blank Image
INVESTOR SENTIMENT READINGS
High bullish readings in the Consensus stock index or in the Market Vane stock index usually are signs of Market tops; low ones, market bottoms.
Last Week 2 Weeks Ago. 3 Weeks Ago
Consensus Index
Consensus Bullish Sentiment 50% 56% 60%
Source: Consensus Inc., P.O. Box 520526,Independence, Mo.
Historical data available at (800) 383-1441. editor@consensus-inc.com
AAII Index
Bullish 24.4% 30.2% 25.6%
Bearish 47.7 33.4 41.4
Neutral 27.9 36.4 33.0
Source: American Association of Individual Investors,
625 N. Michigan Ave., Chicago, Ill. 60611 (312) 280-0170.
Market Vane
Bullish Consensus 50% 59% 55%
Source: Market Vane, P.O. Box 90490,
Pasadena, CA 91109 (626) 395-7436.
FC Market Sentiment
Indicator 57.8% 56.3% 56.2%
Source: First Coverage 260 Franklin St., Suite 900
Boston, MA 02110-3112 (617) 303-0180. info@firstcoverage.com
FC Market Sentiment is a proprietary indicator derived from actionable sell-side trade ideas sent by the sell-side to their buy-side clients over the First Coverage platform. Over 1,000 institutional sales people at more than 250 firms participate on the First Coverage platform and have contributed hundreds of thousands of ideas since inception. Each Idea is associated with a ticker or sector and is tagged bullish or bearish by the creator. This data is aggregated at the sector, industry and market level. The FC Market Sentiment score ranges from 0-100 (0=most bearish, 50=neutral, and 100=most bullish) and represents a completely objective, real-time view into what advice the sell-side is providing to their buy-side clients
Citigroup Panic/Euphoria Model

Market Sentiment

Advertisements

~ by behindthematrix on June 13, 2011.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: