Updated April 2020
Anxiety Sensitivity Index Not Supportive Of A Market Crash
This week’s sentiment data reveals that the majority of investors are in the neutral camp and until the number of individuals in the bullish camp surges past the 65% for weeks on end, the idea of a crash is just a myth.
This market falls into the insane category as well, and that is why we have been focusing so strongly on the trend indicator and market sentiment. And technical analysis comes in at distant a third. Insane individuals have been known to do the unpredictable, and this applies to this market. It has defied all expectations. As a further precaution when our key Technical Indicators on the monthly charts of the DOW, SPX and Nasdaq experience bearish crossovers we will take a more defensive posture.
Anxiety levels, in general, are too high and as a result, a stock market crash is unlikely at least for now.
The crowd is still too anxious to support a stock market crash scenario; a stock market correction is possible but a crash is out of the question. Markets climb a wall of worry and fall down a cliff of joy, the wall of worry continues to grow so the markets are more likely to trend higher before pulling back. Astute investors should consider using strong pullbacks to open new positions in strong stocks.
Strong Corrections and Crashes are triggered by Bullish Readings
The masses for whatever reason have refused to embrace this market and until they do (something we have been saying for years on end) the markets are destined to trend higher. All strong pullbacks should be viewed through a bullish prism.
Anxiety Sensitivity Index Readings Update March 2020
As always the masses are panicking at precisely the wrong time. We also see new subscribers overreacting to the current pullback, and this informs us that we are on the right side of the markets. While the trend is up, there are going to be hiccups along the way as no market trends in a straight line. The higher it moves the more volatility one can expect. Volatility is a Trend player’s best friend; in this case, it’s up so astute players can use strong pullbacks to add to current positions or open new positions.
Stock Market Crash Outlook March 2020 Update
Huge amounts of liquidity are already being added to this market, but you have seen nothing yet. Helicopter money is about to become a reality and regardless of the mantra it’s different this time, nobody can fight a fed that is determined to unleash the mother of bailout packages
It appears that markets are experiencing the “backbreaking correction” one which every bull market experiences at least once and is often mistaken for the end of the bull. In today’s manipulated markets, one cannot tell which correction will morph into the backbreaking correction, as free-market forces have almost been eliminated from today’s markets. While it feels like the end of the world, such corrections always end with a massive reversal. Given the current overreaction to the coronavirus, there is now a 70% probability that when the Dow bottoms and reverses course; it could tack on 2200 to 3600 points within ten days. Interim update March 9, 2020
Buying Opportunity of a lifetime?
Based on our indicators the markets were expected to let out some steam, but mass hysteria turned a normal correction into a bloodbath in the short term timelines and a generational buying opportunity when viewed from a long term perspective.
Typically, the markets would pullback sharply then tread water until our indicators moved into the extremely oversold ranges. If the sentiment is still trading in the maddens zone when our technical indicators hit the extremely oversold ranges, there is a 90% chance; it will trigger the father of all buy signals.
There is one massive indicator validating the outlook that this current makes for a great opportunity. It’s insider activity, and the readings on this indicator are off the charts.
Insiders have been using this massive pullback to purchase shares, and one way to measure the intensity of their buying is to check the sell to buy ratio. Any reading 2.00 is considered normal, and below 0.90 is considered as exceptionally bullish. So what do you think the current ratio is; well, it’s at a mind-numbing 0.35, which means these guys are backing up the truck and purchasing shares.
So what are the readings today? Based on very heavy transaction volume, Vickers’ benchmark NYSE/ASE One-Week Sell/Buy Ratio is 0.33, and the Total one-week reading is 0.35. Insiders are not just buying shares, they are devouring shares. Insiders behaved in a similar fashion in late-December 2018, after stocks crashed on Christmas Eve; in early 2016 when stocks also corrected; and in late 2008/early 2009, at the depths of the Great Recession correction. Those were spectacular times to buy stocks. Insiders seem to be telling us that today offers a similar opportunity. https://yhoo.it/2TV0cE2
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