The S&P 500 sentiment signal is still indicating "Tentative Sell" although very close to indicating "Sell" (green line Chart 1). This is not the only signal that is indicating sell. Weekly average volume has also suddenly dropped for the past two weeks despite market improvements. The weekly average volume was 2.85 x 10^9 last week and 2.80 x 10^9 the week before. These are both outside of two standard deviations of a 40 week average of 3.88 x 10^9. This is a significant reduction in trading volume. Low trading volume as the market trend is improving is generally not a good signal. This is just one more technical signal indicating that it may be a good time to re-balance some assets away from stocks or stock mutual funds. Based on the trend of the long term sentiment signal the "Sell" period will last until around 8/15/2012.
This weeks expected S&P 500 trading range is between 1,316 and 1,397 (Chart 2 below).
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| Chart 1: 07/13/2012 S&P500 Sentiment Signal |
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| Chart 2: 7/16/2012 Weekly Expected Trading Range |
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