11th day of QQQ short term down-trend; sentiment still too bullish; GMMA chart of S&P 500 index

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IBD announced in Thursday’s edition that the latest sentiment poll had almost twice as many bulls than bears.   This amount of bullish advisers is not what you would expect if the market were near the bottom of a decline. This weekly GMMA chart of the S&P 500 stock index shows that the shorter term averages (red) are just breaking below the longer term averages (blue).   It is still too early to determine if this down-trend will develop into a stage 4 major decline. Click on chart to enlarge.

With the futures down a lot   this morning, we need to see whether this renewed decline will hold above the recent lows.   I am in cash and safely watching from the sidelines.

2 thoughts on “11th day of QQQ short term down-trend; sentiment still too bullish; GMMA chart of S&P 500 index”

  1. Dr Wish, you were correct that this market has not seen the bottom. IBD has been saying for over one month that “Market in correction”. We should’ve parked our moneys in money market by that time!!!

  2. Dr Wish, I’m still trying to learn about the Stan Weinstein Stage 4 from his book. As of Aug 18 all of the DJI, S&P 500 and the Nasdaq 30 week averages have become flat. None have turned down. When they turn down what percentage should they turn down before a stage 4 is entered. Thanks, Tom

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