Waiting For A Breadth Thrust; Chinese Investors' Long Slog

This is an abridged version of our Daily Report.

Waiting for a thrust

Breadth recent hit a deep oversold reading, now many are looking for an upside “thrust” that signals a return of buying interest.

But waiting for a breath thrust hasn’t worked well in bull markets. Future returns were better, and more consistent, by just buying into oversold. During bear markets, the opposite was the case.

Chinese investors’ long slog

The Shanghai Composite’s decline over the past 100 days is the worst since 2008, as it’s only enjoyed 37 positive sessions during that stretch. It’s also suffering some of its worst breadth in 15 years.

Wall Street analysts are pulling back

Analysts lowered their price target on 27 more stocks than they raised targets on, the most since April. According to the Backtest Engine, when this drops below -25 stocks, the S&P rose 90% of the time over the next two months, averaging 5.2%.

Homey don’t play that

Homebuilders are the most-hated sector. The 20-day Optimism Index on XHB has dropped below 25 for only the 2nd time since the 2009 bottom.

The post titled Waiting For A Breadth Thrust; Chinese Investors' Long Slog was originally published as on SentimenTrader.com on 2018-10-18.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.

Follow us on Twitter for up to the minute analysis of market action.

Not ready to signup up for a free trial yet?

Signup for our Daily Lite email to receive highlights of our daily report, research and studies.

Follow us on Twitter:

Subscribe to our Youtube Channel:

RSS Feed

Subscribe to the Blog RSS feed