High Sentiment Points To Correction

A few charts to consider:

Bullish percentages S&P

Notice that the RSI is high (79) and that MACD is about to cross giving a negative signal.
Also notice that we are about to hit the 200 day MA. This may act as resistance.

Bullish percentages on the NYSE

Pretty much the same story here. RSI is very high, bullish percentage has just crossed 200 day MA, and MACD is just starting to turn negative.

Let's look at VIX:

Notice that RSI is in the mid range, so there is much upward potential.

MACD turned upward around Sept 23rd and continues to rise.

Four out of five of the last trading sessions have crossed both the 200 day MA and the 50 day MA, albeit briefly.

Is VIX telling us to expect more volatility, and hence lower stock prices in the immediate future?

If these assumptions are correct, it could be very bullish for the US dollar and bonds, and bearish for crude oil and commodities, as we alluded to in our previous post.

Stay tuned, as this bear market has plenty of teeth left, in my view.


  1. PW--FWIW, i am getting similarly negative readings from my proprietary indicators. Stay tuned. thanks for sharing.

    Michael H. in Cincinnati


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