Sentiment has Completely Changed
Good Morning.
The market is short-term neutral today.
The VIX broke above yearly highs and when this occurs it begins touching many things. The market has lost over 8% since mid-September and no one can give a concrete reason why. This coincided with record levels of bullishness by equity advisors (many who were as bearish on bonds). Now with the correction in place, and with bonds driving higher, sentiment has completely changed.
At this point a bounce is expected, especially if there is a down opening followed by an intra-day reversal higher. When it occurs it will likely be a large move up and from there things will settle in. Longer-term this has likely transitioned into neutral/bear market but at an 8% drop, a good deal of the damage has already been done. If you held in well over the past month, you’re in great shape and that’s a good place to be.
I keep writing this message and will continue to do-so; please use extra caution here.
Today’s Potential Opportunities on Further Pullbacks:
ETFs: QQQ