• 22 hours Is Tech Billionaire Peter Thiel Done With Trump?
  • 1 day Musk Takes To Twitter To Troll The SEC
  • 2 days Lunar Mining May Commence As Early As 2025
  • 3 days Immigration Will Go Bust Without $1.2B Bailout
  • 3 days The Economics Of The Space Race
  • 4 days Why The World's Central Banks Aren't Yet Sold On Renewables
  • 5 days How Much More Cash Can Uber Burn?
  • 5 days Inside The Biggest Counterfeit Gold Scandal In Recent History
  • 5 days EU-U.S. Trade Relations Are Deteriorating
  • 6 days Over 184 Companies Have Bailed On Facebook
  • 6 days BP Sells Petrochemical Business For $5 Billion
  • 6 days U.S. Moves To Secure Domestic Rare Earth Supply
  • 7 days E-Commerce Explodes As Boomers Go Digital
  • 7 days Major U.S. Cities Are Turning To Renewables
  • 8 days Economic Reopening Backfires, COVID Surge Snaps Recovery
  • 8 days How Are Low Car Sales Impacting The Metals Market?
  • 9 days Are Gold Stocks Still Undervalued?
  • 9 days Singapore's $3 Billion Oil Trading Scandal
  • 10 days Luxury Clothing Isn’t A Priority As Americans Grapple With COVID-19
  • 10 days Natural Gas Demand Hits 25-Year Low
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Stock Market, Sentiment, and Trend

Dow Jones Industrial Average   10,543
Value Line Arithmetic Index   1732
30-Year Treasury Index 4.82%

The Big Picture for Stocks: As to the 4-year cycle, the bull phase began in 2002. Investors should focus on the coming bear market which should extend into 2006.

Technical Trendicator (1-4 month trend):
Stock Prices   Down
Bond Prices   Down

The attached chart on the Value Line Arithmetic Index summarizes the intermediate picture. We are overbought and have apparently rolled over to the downside.

Also of note is that an average of three sentiment indicators that I track (Consensus, American Association of Individual Investors, and Market Vane) has reached an extreme. The 3-week average of those bullish in these surveys reached 66% the week of November 26. This has been high enough for a top in some intermediate trends in past market cycles, but has sometimes peeked at slightly higher levels. For example, the average of these indicators reached 70% bullish in January of this year before turning down the last week in January.

Trend as well as level is also important in interpreting these numbers. If you assigned a sell signal to the week that the 3-week average of these indicators turned down back in the week ending January 30, 2004 - this sell signal preceded the actual top in the blue chip averages by two weeks, and was six weeks prior to the actual top in the mid-cap indexes. But there was only limited upside progress in the market from the time of the sell signal.

Using the same parameters to define a sell signal (a decline in the 3-week average of the sentiment surveys), we got a sell signal the week of December 3.

So it is not impossible to have a bit more upside, or at least a little more time, before a more protracted slide. Seasonal tendencies would support the idea of more rally, as the market usually does well from mid December into mid January.

But given the picture of the market you see attached, I would not bet much that there will be another good chance to sell.

Back to homepage

Leave a comment

Leave a comment