In my series of posts "SP500 Approaching Bubble Territory' I was discussing my arguments for a major bearish move, and i believe we are very close to my awaited point. I am waiting for final confirmation signal which may occur today or Monday to post my short position. For now, I close any long position and cancel any long outlook.
Market Breadth:
Swings from excessive bullish and bearish sentiment have been a good contrarian market indicator for the past 6 years. Every time the indexes of stocks above or below 200-days Average reached an extreme of 90-100 percent a correction in SP500 was close.
Instances where the index started falling, diverging away from the SP500 index (indicating internal strength is weakening) were bearish signals, as at least a hefty correction followed. The chart below Illustrates these divergences, where periods of prolonged divergence followed by a more sever downside move, while minor divergences followed less severe corrections.
Market Breadth:
Swings from excessive bullish and bearish sentiment have been a good contrarian market indicator for the past 6 years. Every time the indexes of stocks above or below 200-days Average reached an extreme of 90-100 percent a correction in SP500 was close.
Instances where the index started falling, diverging away from the SP500 index (indicating internal strength is weakening) were bearish signals, as at least a hefty correction followed. The chart below Illustrates these divergences, where periods of prolonged divergence followed by a more sever downside move, while minor divergences followed less severe corrections.