Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Sentiment Indicator Warned Of A Stock Market Decline

Published 14/05/2019, 08:12
Updated 17/03/2024, 07:38

Both FTSE 100 and S&P 500 have completed five waves down from their respective tops, the next move is a counter trend rally. The FTSE is oversold as indicated by the oversold 13-day BTI and Top 20 differential.

An escalation in the trade war was not expected, Trump has repeatedly said that trade talks were going well. The S&P rallied to new all-time high on trade talk optimism. Now Trump is not happy, he has increased tariffs on some Chinese goods and his administration is looking at imposing more tariffs. Meanwhile China responded with new tariffs on some US goods.

The S&P 500 is already down 5% from the all time high. As expected now Trump is talking up the markets, he does not like when the markets go down. Now he says there is still a good chance for a deal in the next few weeks. Markets are rallying this morning. He is referring to the G20 summit next month where he will meet President Xi.

People have no choice but to follow Trump: he is a master when it comes to pushing the stock market higher. You will recall in December last year when stocks were crashing he told people to buy, he was right. But one day Trump will be wrong and stocks will crash. The Fed will be wrong too. Presidents and central bankers do not always act in a rational manner.

What we know is that sentiment turned bearish at the start of May when the stock market was in a raging bull run with few bears around. My sentiment indicator, the BTI, was correct, it turned bearish on May 2nd. The Elliott wave pattern together with the change in sentiment was a warning the stock market would decline. Stock markets are now oversold, a rally is imminent.


SPX

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.