Extremely bullish feelings are in plenty and this is a cause for concern.
As I said before, the CBOE Put Call ratio is at an extremely low level and historically when you have seen such extremes , markets have turned lower
In many indices , the number of new 52 week highs have failed to confirm with the actual price peaks that the indices have achieved. This means that lower number of stocks are now making new 52 week highs. The rally is losing steam.
Mutual fund asset to cash ratio is at an extreme. They are almost fully invested. Historically at such extremes, markets have turned lower.
The II Bull ratio and the AAII Bull ratio are closer to extremes seen in the last decade or more. This is a sign of an impending correction in the market.
The NAAIM and the TSP survey is indicating extreme optimism and this level of extreme sentiment has coincided with market tops or corrections.
Surveys are indicating that Japanese NKY is being hated while people love the EM story. This indicates taking a bullish view on NKY and bearish on EM.
Volume is important to look at. As the market rally slows, trend followers jump ship and sell. Buy the dip mentality players kick in and start to buy. So it is common to see spikes in trading volume at reversal points.
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