SentimenTrader Blog - Page 2


2020-02-13 | Jason Goepfert | Lite

ManicWith incessantly rising stocks and commission-free trading, retail traders have become manic. We could reasonably expect trading activity to rise under conditions like this.But it has not only risen, it went parabolic in January. On E-Trade alone, trading activity has surpassed 450,000 trades. It was even higher on TD Ameritrade.The 6-month rate of growth in trading activity at those two brokers has been matched only once before, as stocks were peaking in early 2018. Of course, this is ...

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2020-02-13 | Troy Bombardia | Premium

Here's what I'm looking at:New highsThe U.S. stock market continues to make new highs, with tech stocks leading the way. As a result, the % of NYSE issues making new highs has risen to the highest level in more than 2 years (since January 2018).When New Highs % surged to the highest level in 2 years, it usually led to more gains for equities over the next 2 months. This is another example of the market's strong momentum, which thusfar has won out over sentiment:Job OpeningsAs the WSJ noted, ...

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2020-02-12 | Jason Goepfert | Daily Report

The combination of rising stocks and zero commissions has led to an explosion in trading activity; SPY has gapped up 8 out of 12 days; Most S&P 500 stocks have held above their 50- and 200-day averages for 4 months; The S&P has notched an all-time high on more than 30% of days in 2020

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2020-02-12 | Jason Goepfert | Lite

A less greedy highMany sentiment indicators hit historic extremes of optimism in December and January. After stocks dipped in late January, sentiment reset. Now that they’ve moved to new highs, it’s being accompanied by less optimism.The CNN Fear & Greed index is a model created by and published by CNN on their public website (we suggest you visit their site to learn more about the model). This is our calculation of the model based on the inputs discussed on their website. The model measures ...

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2020-02-12 | Troy Bombardia | Premium

Here's what I'm looking at:Grind higherAnother day, another all-time high. The market's rally continues, reminding me of the phrase "never short a dull market". The S&P 500 has made 36 all-time highs over the past 4 months, a feat that has been only matched 4 other times:While it's easy to assume that this is short term bearish for stocks, that hasn't usually been the case historically:Granted, the sample size here is small, so let's relax the parameters and look at cases in which the S&P ...

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2020-02-11 | Jason Goepfert | Daily Report

Stocks have rallied to new highs but the CNN Fear & Greed proxy model is well below its January peak; Over the past year, 7 Hindenburg Omen warnings have triggered; Over the past month, the S&P 500 and 10-year Treasury yields have shown a near-record positive correlation; The growth vs value ratio is overbought

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2020-02-11 | Jason Goepfert | Lite

Speculative spigotWhile it’s arguable to suggest that investors were showing speculative excesses in January, with many indications that they were, recently one of the few signs is trading activity in Tesla. Looking at other large jumps in compressed time frames among major equity index members, this is a worrying sign.Returns in the S&P 500 and Nasdaq 100 after any day in which a (current) member of the S&P 500 or Nasdaq 100 jumped more than 50% over only a week’s time were poor.There was a ...

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2020-02-11 | Troy Bombardia | Premium

Here's what I'm looking at:Growth vs. ValueGrowth has been all the rage throughout this bull market, and continues to be so. Tech continues its nonstop rally, and stocks like Tesla are popping. The following table illustrates the S&P 500 Growth Index vs. the S&P 500 Value Index.Turning Growth vs. Value into a ratio, it's clear that growth has surged over the past few months, pushing the ratio's 14 week RSI into overbought territory (i.e. >70).Does this automatically mean that growth will ...

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2020-02-10 | Jason Goepfert | Daily Report

When a member of the S&P 500 or Nasdaq 100 jumps 50% in only a week, like Tesla did, it was a sign of speculative sentiment; The S&P is hitting a new high but the McClellan Oscillator is negative; The new high in stocks comes with a 4-month high in the U.S. dollar; Oil has dropped 5 weeks in a row

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2020-02-10 | Jason Goepfert | Lite

Island of misfit bearsS&P 500 futures carved out an island formation over the past 3 sessions. This is when prices gap up above the prior day’s high, have a good day, then gap down below the high day’s close. It leaves the high day kind of sitting on an island by itself.It looks ugly on a chart and would be a clear bearish pattern among technicians. It also formed a "hanging man" for those familiar with candlestick formations.Historically, its record has been mixed. It looks ugly on a chart, ...

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