On Friday’s Kudlow & Company, I mentioned that we are overbought, and we should be expecting a pullback over the next week or two. I said I expect it to be mild, and buyable.
On that same subject, JDC points us to Carl Swenlin’s chart, which suggests sentiment is way too Bullish:
Chart Courtesy of Decision Point
One of the fascinating things about the market is how so many different approaches an be used to reach the same conclusion. You can use a variety of different methodologies to determine am overbought conditions:
• The last few days of the advance has been on decreasing volume;
• on a time based system (See Raymond James’ Jeff Saut for his day count);
• Dick Arms uses the the Trin (or Arms) Index;
• Charles Nenner of Cycle Forecaster (and one of my partners) uses cycles;
• Kevin Lane of Technimentals suggests internal conditions have decayed predicting a short term pullback;
• and the aforementioned Sentiment factor.
All 6 of these methods suggest upcoming softness.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.