There were 7 new highs and 1,221 new lows in my universe of 4,000 stocks on Friday. The QQQQ completed the 14th day of its short term down-trend within a longer term down-trend. I heard on Fast Money that the AAII survey has the most bearish reading ever. Furthermore, the momentum indicator in IBD for the Nasdaq 100 index futures is below 25%, the place from which rallies tend to begin. And with the T2108 at 7%, in deeply oversold territory, I am becoming reluctant to add more shorts right now.
Last week, a person who knows nothing about the market asked me how to short stocks. This is reminiscent of the stories of the shoeshine boys providing stock tips, near the roaring 20’s market’s top. The sentiment is just too negative right now. Does this mean the market has to turn up?