Amidst a vigorous market rally since October 2022, it’s rather curious that bullish sentiment hasn’t quite reached its historical average, firmly remaining below 39. At this stage, one would expect it to be at least around 45. There are merely two plausible explanations. First, the financial masses might be in a state of shock, remaining in this zone for a considerable period, as indicated by subscriber data that reveals concern and unease levels similar to October 2008.
For the gauge to move to the hysteria zone, one of three sentiment measures needs to experience a sharp move. For example, bullish readings dropped to the 10-12 range, or Neutral readings surged to 55. Market update January 30, 2023
Anxiety and uncertainty amongst subscribers now almost mirror the readings of October 2008. What happened subsequently? A single final drop, followed by the market hitting rock bottom, but leaving investors in a psychological limbo for nearly a decade.
If the apprehension among T.I. subscribers reaches an all-time high, it will be integrated into the criteria for FOAB. Moreover, only three more conditions are left; upon their fulfilment, we shall witness the highly elusive FOAB. In such an event, everyone at T.I. would invest all resources at our disposal, and even more through leveraging, into the Market. However, we strongly advise against the use of leverage or margin, except for those prepared to undertake the associated risks. Two criteria are dangerously close to being fulfilled; if they are, it will trigger a MOAB by default.
The second possible explanation is that traders are patiently waiting for better prices. The problem, however, is that the prices they were hoping for have already been reached. If the Market pulls back again, it remains uncertain whether traders will take action or continue to wait, assuming that even better prices will follow.
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