Probably you still remember my call for 100 points jump for S&P just 2 weeks ago (see here). Back then, AAII investor sentiment weekly report showed that the investor's mood was really depressing, 44% bearish vs only 20% bullish! So within days, our mission had been accomplished with the 100 points up move and then some. We are seeing now about 120 points gain since then. The mood has really changed as I have seen many calls for all time highs and the sky seems very clear for general investors now. Sure enough, we just saw a new weekly report released by the AAII survey showing 33% of respondents now bullish with 31% bearish. While it is still not outright bullish, it is the first time in a few weeks that bulls outnumbered bears. Can this bullish sentiment continue? Sure it can but I won't count on it!
Of course, I'm not smart enough to tell you exactly what may ruin this bullish sentiment. After all, we seem to see all the positive factors in place for an uptrend, lower interest rates, a tentative trade deal with China, and even a possible Brexit deal coming....But fortunately I don't need to be too smart to tell you why. Rather I just need to rely on my TA indicators to tell me what is the most likely move in the near term with fairly good accuracy. And exactly in the contrast to my bullish 100 points call two weeks ago, I'm not calling for a 100 points plunge fairly soon. This is what my crystal ball telling me right now. For sure I can be wrong, especially in terms of the timing that I could be too early as quite often the case for me, but I'm confident that a sizable leg down is coming soon, if not immediately. This is how I'm positioning myself now. Here is my prediction: We may see S&P down to 2900ish and VIX up to 18-20 in the next few weeks.
BE PREPARED!
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