$SPY- an upward bias from fear to greed?

CNN Money”s “FEAR AND GREED INDEX” – http://money.cnn.com/data/fear-and-greed/?iid=HP_LN – turned up Friday , moving from an extreme fear reading to a mere fear reading.

That may seem like some kind of market joke but it is often an indication that market is at a turn at the bottom of a sell-off.  If so, the uncertain sideways move this last week (up solidly Tuesday, down near as solidly Thursday) likely will resolve to the upside this week.  The past recent history of the index in relation to moves on the S&P 500 ETF SPY is below.  The blue diamond line is SPY.  The Red is the Fear and Greed Index. Note when Fear-andGreed touches or dips below the 25 level then turns up what follows.

In addition, two of my main daily signals (breadth and volatility) are on buys while the third (the Nasdaq Composite price) is down three days in a row.  In this bull market, three consecutive down days in the Nasdaq price has been all that can be had before a bounce.

Also, the breadth has moved up steadily this last week despite the market’s sideways price action, moved up enough to turn long-term breadth positive.  However with short-term breadth has been up six days so a quick could come, but if it is not enough to turn down the long-term breadth, we could have a rally deep into September.

So Monday the bounce?  Then a rally?  That is my bias until it isn’t anymore (which could be as early as Tuesday).

SWING TRADING SIGNALS:

PRICE: Sell. (Day 3).
SHORT-TERM BREADTH: Buy. (Day 6).
VOLATILITY: Buy, (Day 2).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 1).
CNN MONEY’S FEAR AND GREED INDEX: (27 rising, fear).
NIFTY-50 STOCK LIST: 22 Buys; 6 Overbought, 3 Oversold, 5 new buys today, 8 new sells.

(click on the charter for a larger view)

 

Leave a Reply