I’ve added to long stock indices positions this morning (SP500, Dax and Hang Seng). My original position was fairly small. Here’s why I’ve added.
AAII bearish sentiment has moved to the levels seen at last year’s market bottoms. In other words, bullish sentiment has very rapidly evaporated.
Source: PragmaticCapitalism / AAII
There is a positive divergence on the Nymo, which has historically signalled a bottom.
Source: Cobra / Stockcharts (plus my green positive divergence lines)
To reiterate my view: I expect equities to track overall sideways with volatility into next year’s solar peak, something like the action in the box below. That means I’m looking for opportunities for shorter term moves, up or down, where the indicators line up.
Source: Charles Githler
Economic Surprises continue to languish, Euro debt continues to fester. However, OECD leading indicators paint an overall positive picture ahead. The period into the solar peak is typically one of growthflation. I reiterate that I expect a natural pick up in growth or one with central bank assistance. There is some evidence here that we may swing up naturally ahead.