Contrarian Data Point of the Day

Courtesy of Reuters, BofA-ML fund manager survey finds stock bullishness at a new 10 year high. Early market action is down following retail sales miss.

Whether this marks a short term top only time will tell, but with the market as extended as it is, we need to be vigilant. The more extended the market, the faster and sharper the correction when it comes. We have some nice gains built up, let’s hold on to them.

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3 thoughts on “Contrarian Data Point of the Day

  1. I agree that the angle of ascent may very likely produce a similar angle of descent, when the time comes. But perhaps the descent could be steeper as usually is when selling a top. It must be seen.

    I am diligent to watch for technical weakness, then the next step is to see support levels broken.

    But the stock market is far from that point, IMO.

  2. I do agree Shirley, we certainly don’t have a technical sell signal yet…but I’m on the lookout for one. My suspicion is that when it comes, we won’t have a great deal of time to ponder what’s going on.

    With regard to angles of ascent and descent, remember the old saying “the market takes the stairs up and the elevator down” which simply reflects the common observation that it can take away in a few trading days the gains that took months to achieve. This is why learning when to sell is more crucial than learning when to buy.

    • Thanks for the feedback. What I see for the S&P, on all 3 times frames (monthly, weekly and daily), is the Rising Wedge. Perhaps when price reaches the apex, there may be a pullback and, on the daily chart, today price went above the top line for the wedge, closing on the line.

      I am curiously watching this progression. And, of course, I want to see how the market moves forward toward the June deadline for QE2.

      Thanks for this interchange of ideas.

      Shirley

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