Monthly Archives: October 2017

Lack of Enthusiasm

This rally lacks enthusiasm from traders and investors on Twitter. Sentiment for the S&P 500 Index (SPX) didn’t move higher as the market finally jumped on Friday. The good news for the bulls is that sentiment held its confirming trend line (the bottom of the triangle).

 

Another sign that enthusiasm is lacking comes from the number of bullish stocks on the Twitter stream. It isn’t moving up with the market. Breadth is ok, but only because no one dares to short as evidenced by a decline in the number of bearish stocks.

 

Price targets for SPX show everyone looking at 2600. There are virtually no tweets at any other level with the exception of observations of current prices. It’s as if everyone sees 2600 as inevitable, but waiting to see what happens afterward.

 

Conclusion

The market is moving higher without enthusiasm from market participants. Sentiment is lackluster, the bullish count is falling, and price targets are all calling for 2600 on SPX. Without enthusiasm, I suspect we’ll get dip once SPX gets close to 2600. That dip should be larger than we’ve seen in a while.

facebooktwittergoogle_plusredditpinterestlinkedinmail

Sideways Consolidation

The S&P 500 Index (SPX) is consolidating in a sideways range. As SPX consolidates, sentiment from the Twitter stream is painting a triangle. The break of the triangle will point the next direction in the market. If it breaks to the downside, we’ll probably need a small dip before the market can continue upward. A break to the upside should see SPX at 2600 pretty quickly.

 

Here’s the support and resistance levels tweeted by traders for SPX. 2600 is where they expect the next rally to pause. Traders aren’t expecting prices to dip below the 2535 level at the moment.

 

Breadth calculated between the most bullish and most bearish stocks on Twitter is falling a bit as the market consolidates. One concerning thing in this chart is that the bullish count stalled even as SPX ran from 2500 to 2550. Bulls want to see the bullish count rise with the market.

 

Conclusion

The market is consolidating in a sideways pattern. Sentiment is painting a triangle so all we have to do is watch which direction it breaks.

facebooktwittergoogle_plusredditpinterestlinkedinmail