MARKET ENVIRONMENT: by Woody Dorsey. Sentiment came in today at @ 43% Bullish. The last Zero sentiment reading represented another scary low. As noted: “Severe price moves and extreme shot term oversold, qualifies that as a “crash like” signature. That inferred that an extreme was close. The FOMC was indeed the catalyst for a temporary discounting and another short-covering rally.” Ok. So, bounces continue but there is no sign of a real low. Structural Tightening may continue for Decades. This market is not what most everyone thinks it is. It is still dangerous.
NEAR TERM: Understand what was offered: “Volatility continues. Near term patterns remain uncertain and it remains wise to watch the game. You do not have to play this Market game.” As month end and quarter end loom, there may even be more uncertainty.
INTERIM TERM: The Interim profile still suggests a durable low may not occur until the fourth quarter. Markets may keep toying with us all, both ways. Until then, be wary of trying to play games which assume getting the market right.
DORSEY MARKET SENTIMENT: Sentiment has been overly optimistic for decades. This is a different and, new time. Instances of these extreme sentiment ‘told’ that a new Recognition occurred. The latest 0% bullish “told” of a potential ‘crash like’ set up signaling Bounces..
MARKET SUMMARY: Repeat, and boring? But still not understand: “Equity Markets remain under secular corrective pressure. Central Bankers will be dealing with Inflation for a long time.” Volatility and Uncertainty will continue. Wars never end well, nor will, 2022. Bounces are expected but not necessarily when you expect them.
TECHNICAL VIEW by Gary Dean: The buy trigger at the 200 week MA continues to work. If following our triggers, you would be out of 1/3 with at 3800 for a 140 point spx profit. 3800 seems to have some sellers waiting, but if the bulls can hold support and then break above the 3800, we should see another short squeeze to take the spx to our upside target 2 at 3900, where I will close another 1/3 and let the final 1/3 run with a rising stop and final target of 4000. I am NOT seeing any sell signals yet, but the bulls need to defend support levels or the bears take over again.
Momentum is starting to look a little tired as the bulls try and get above the 3800/3836 resistance zone. We may need some backing and filling lower before the bulls try and get through that resistance zone. The 3755 is important support, but 3690 is the breakdown line.
There are some sell signals on the 15’s, which is suggesting we may see some selling in the coming hours/days. Watch the 3755/3690 support, it has to hold if the bulls are going to try higher. Leave stop at entry for the remaining 2/3 long position.
Summary: The safest way to trade this market is to short rallies-THAT HAS NOT CHANGED! The0% bullish sentiment, buy signals on the 60’s and heavy support at the 200 week ma, continues to work out perfectly as a buy trigger. There are some sell signals on the 15’s, so expect some backing and filling before the bulls try and take out the 3800/3836 resistance zone. G
Information is for paid subscribers & may not be copied or distributed. © Copyright 2022. The information contained herein was provided by Sentiment Timing and/or its publishers does not make any representation or warrant with regard hereto, including but not limited to those of accuracy, completeness, reliability, timeliness and/or infringement on the rights of third parties. This Publication expresses a view on the markets but is not intended to provide any specific recommendation to buy or sell any security. Investing is Uncertain and always carries Risk. Of Losses. Subscribers should always assess Market Risk parameters with their broker or financial adviser.
Information is for paid customers and may not be copied or distributed Copyright 2022