Monday, August 27, 2012

Selling Period Extended, but Near End

The market signaled entry into a "Tentative Sell" period, according to the S&P 500 Sentiment chart below, on June 13, 2012 and entered the confirmed "Sell Period" on July 18th.  In my last post on July 15th, I stated based on the trend of the long term signal that the "Sell Period" should end around August 15, 2012.  The signal stayed on track until just prior to August 15th when the long term signal leveled out and has remained on that trajectory for some time.  I have been too busy to post since July 15th, completing rental property repairs,  and I apologize for not posting sooner if anyone was interested in this information.  However, it appears clear to me that the trend of the long-term signal is likely to continue to go lower and follow the intermediate signal trend.  I believe we will see a retracement to around the 200 day simple moving average or 1356 as fears settle in that there is little gain left in the market for the rest of the year and that  promises of near future stimulus are empty.

Image 1: 08/27/2012 S&P 500 Market Sentiment Chart

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