The Weekly Trader

Each weekend, I study market behavior using sentiment and technical indicators. The goal is to use clues, observation, and indicators to determine if we are in a bullish, bearish, or sideways market environment.

RELEASED: Understanding Options (McGraw-Hill, 2E), Understanding Stocks (McGraw-Hill, 2E), and Predict the Next Bull or Bear Market and Win (Adams Media): http://bit.ly/1bl0ZNk

My latest MarketWatch article: http://goo.gl/SJuzAW

 

AAII survey (7/2/2014)

38.5% Bullish. 22.4% Bearish. 39.1% Neutral.

Bearish: If sentiment is over 50% bullish.

Bullish: If sentiment is over 50% bearish.

 

Investors Intelligence (7/2/2014)

57.6% Bullish. 16.1% Bearish

Bearish: If sentiment is over 60% bullish.

Bullish: If sentiment is over 60% bearish.

 

VIX: 10.32 (on 7/5/2014)

Bearish: Less than or near 12.

Bullish: Greater than or near 40.

 

Moving Averages (daily): S&P 500 is above its 50-, 100-, and 200-day moving averages, and pointing up.

Bearish (Short-term Downtrend): Index crosses below 50-, 100-, or 200-day MA.

Bullish (Short-term Uptrend): Index crosses over 50-day, 100-day, and 200-day MA.

 

MACD (S&P 500): MACD is above zero line, and above its red 9-day signal line. (Note: I’m using the settings, 19,39,9, recommended by Gerald Appel, MACD’s creator.)

Bearish: MACD line crosses below 9-day (red or gray) signal line. MACD line (black line) crosses below zero line.

Bullish: MACD line crosses above 9-day signal line. MACD line crosses above zero line.

 

RSI (S&P 500): RSI is at 73.62 (on 7/5/2014)

Overbought (i.e. Bearish): When RSI rises to 70 or above.

Oversold (i.e. Bullish): When RSI falls to 30 or below.

Note: RSI can remain overbought or oversold for extended time periods.

 

Bonds: U.S. 10-year yield is at 2.65% (on 7/5/2014).

Note: 3.0% or higher is significant (consider selling bond funds as yield rises). 3.5% or higher and risk increases (for bondholders).

 

Analysis: Just like last week, sentiment indicators are frothy and overbought, which means the bulls think the market will not go down for a few years. Since human nature never changes, eventually the market comes back to earth, and sometimes very abruptly. Technical indicators are still showing the market is in an uptrend. When we look deeper, we see that as the market goes higher, fewer leading stocks are participating. This is a bearish signal. In addition, more Dow stocks are deteriorating, another red flag. To the inexperienced, the market appears strong. In reality, there are cracks.

Opinion: Now that the Dow just went past 17,000, it will be hard to convince most investors of the dangers that lie ahead. More long-time bears have thrown in the towel and given up on their bearish positions. Guess what? This is exactly what happens at market tops!

I know that it is hard to believe the market will ever go down. The cheerleading media, the Fed, Wall Street, and everyone connected to the financial markets are doing everything possible to make you believe the market goes in only one direction: up. They’re wrong. The market will go down, and it will happen sooner than most people think.

If you don’t believe me, try and remember January 2009. That was when the financial world seemed to be over and no one wanted to invest in the market. It was hard to convince anyone to buy at Dow 6,500. The stock market seemed like it would never go up again.

And now, five years later, we’re in a totally different environment. Like the game of Three-Card Monte, while the market reaches all-time highs, leading stocks are selling off, stocks making new highs are shrinking, and the market internals are deteriorating. I know that it is nearly impossible to convince anyone that the bull market might end, but it will, and sooner rather than later. It’s true the Fed has helped the market higher with QE and other financial tools, but that will end.

If you want to play it safe, stay in cash and wait. Do not pay attention to the clowns wearing party hats. They will be the most shocked and amazed when the market turns against them, as it always does. That’s when they say, “Who could have known?” And after the market cracks for the first time, many ultra bullish investors will pretend they were always bearish. Human nature never changes.

Because the market is still going up and might for a little while longer, it’s safer to wait for a bearish pivot or inflection point. At some point in the near future, the market will crack, even if a little. When that happens, I will let you know. Right now, only the most aggressive traders are shorting, and they are feeling some pain (I also have a few short positions but am very comfortable holding them). But the most prudent strategy is to wait on the sidelines and be ready to pounce.

This bull market is nearing an end, and I admit it’s taking longer than I anticipated. Still, the S&P is up 7.42 percent year to date. As I’ve said many times before, be patient and prudent. In my opinion, the downside risk is much greater than what you can potentially make on the upside. Making $0 in cash isn’t ideal, but it’s a lot better than losing money.

Bottom line: Be prepared for some market fireworks in the near future.

 

* Note: These signals are not actionable trades, but only guidelines. Always use other indicators, and your own research, to confirm before buying or selling.

Each weekend, I study market behavior using sentiment and technical indicators. The goal is to use clues, observation, and indicators to determine if we are in a bullish, bearish, or sideways market environment.

RELEASED: Understanding Options (McGraw-Hill, 2E), Understanding Stocks (McGraw-Hill, 2E), and Predict the Next Bull or Bear Market and Win (Adams Media)http://bit.ly/1bl0ZNk

Note: The markets close at 1:00 p.m. ET on Thursday, and are closed on Friday, July 4th.

 

AAII survey (6/25/2014)

37.2% Bullish. 21.1% Bearish. 41.7% Neutral.

Bearish: If sentiment is over 50% bullish.

Bullish: If sentiment is over 50% bearish.

 

Investors Intelligence (6/24/2014)

60.2% Bullish. 16.3% Bearish

Bearish: If sentiment is over 60% bullish.

Bullish: If sentiment is over 60% bearish.

 

VIX: 11.25 (on 6/27/2014)

Bearish: Less than or near 12.

Bullish: Greater than or near 40.

 

Moving Averages (daily): S&P 500 is above its 50-, 100-, and 200-day moving averages, and pointing up.

Bearish (Short-term Downtrend): Index crosses below 50-, 100-, or 200-day MA.

Bullish (Short-term Uptrend): Index crosses over 50-day, 100-day, and 200-day MA.

 

MACD (S&P 500): MACD is above zero line, but even with its red 9-day signal line. (Note: I’m using the settings, 19,39,9, recommended by Gerald Appel, MACD’s creator.)

Bearish: MACD line crosses below 9-day (red or gray) signal line. MACD line (black line) crosses below zero line.

Bullish: MACD line crosses above 9-day signal line. MACD line crosses above zero line.

 

RSI (S&P 500): RSI is at 64 (on 6/27/2014)

Overbought (i.e. Bearish): When RSI rises to 70 or above.

Oversold (i.e. Bullish): When RSI falls to 30 or below.

Note: RSI can remain overbought or oversold for extended time periods.

 

Bonds: U.S. 10-year yield is at 2.53% (on 6/27/2014).

Note: 3.0% or higher is significant (consider selling bond funds as yield rises). 3.5% or higher and risk increases (for bondholders).

 

Analysis: Sentiment indicators are still frothy, the VIX is at historic lows, and volume is low. The market started to sell off a number of times during the week but buyers stepped in to bring (i.e. manipulate) the market higher. Nevertheless, the market seems very heavy, as if it’s struggling to gain traction. The trend is still up, as reflected in the moving averages, a lagging indicator. MACD turned slightly down from last week. Except for the extreme sentiment indicators, we’re not seeing strong technical signals (yet). Bottom line: The market appears to be moving sideways. Eventually, it will have to choose one side or the other.

Opinion: The market acted odd all week. It sold off almost every day, especially at the open, but reversed direction to end each day with mild losses (or gains). The market seems heavy and sluggish, and is having a hard time rallying. Some veteran traders will tell you this is a sign of a weak market. If you listen to them, they will tell you the market is as dangerous as they’ve ever seen.

As you’ll find out soon, many current money managers have never experienced a bear market. These money managers were either in college or selling real estate during the 2007 bear market, and few experienced 2000, 1987, or 1973. History may not repeat itself, but human nature never changes. It will not be different this time.

There is a strong desire by many financial pundits to focus on good news, even when it’s not good. That includes having guests on financial shows who are perpetually bullish. Some of these guests make the following statements:

  1. “The market always comes back.”
  2. “When the market falls, it’s a buying opportunity.”
  3. “A correction of 10 percent is healthy.” (“It’s another buying opportunity.”)
  4. “You should never sell.”

If you believe any of the above statements, then your money may be at risk. Sometimes you have to do the opposite of everyone else, and this is one of those times. No matter how bullish the guests and hosts, no matter how they ignore the evidence, no matter how many times they put a positive spin on the numbers, it’s essential that you are objective. It is not easy in this environment. It seems like everyone is bullish.

Nevertheless, each day I see more red flags, and lately, I’m not the only one. Over the weekend, the Bank for International Settlements (BIS), criticized the Fed for its policies, and said that higher interest rates are coming our way. (FYI, this group correctly predicted the 2007 crash.)

In their report, the BIS warned the Fed about being too open about policy, which can make investors feel too “assured.” Here is a quote from the report: “This can encourage further risk-taking, sowing the seeds of an even sharper reaction. Moreover, even if the central bank becomes aware of the forces at work, it may be boxed in, for fear of precipitating exactly the sharp adjustment it is seeking to avoid,” BIS said. “A vicious circle can develop.”

Note: Here’s are two links to articles about the report: http://www.cnbc.com/id/101795041 and http://goo.gl/EahnEe.

Recently, I’ve noticed that more professionals are publicly criticizing the Fed for refusing to acknowledge inflation. Many are concerned the Fed is “behind the curve” and will be slow to raise interest rates as inflation increases. The Fed talks as if they want to increase inflation. (Be careful what you wish for, because you may get it.)

If I am right about this being a dangerous market, and I believe I am, the market is in treacherous territory. The sky is dark, storm clouds are appearing, and it’s only a matter of time before a thunderstorm (or hurricane) arrives. I am in awe that we have not had a significant correction for so long. Those who study market history know that the longer we go without a correction, the farther the market will drop.

There will be some extremely profitable opportunities in the future, primarily on the short side. This low volatile, sideways market can’t continue indefinitely. When snapping time occurs, and the market finally breaks, I’ll be ready (and I hope you are, too). Meanwhile, it can get boring while you’re waiting for the market to go somewhere. But patience is exactly what is needed to survive.

When the herd finally realizes the market is in trouble, the mad rush out of the exit doors will be spectacular. And that is why it’s essential you prepare for worst-case scenarios now before everyone else wakes up. By then it could be too late.

 

* Note: These signals are not actionable trades, but only guidelines. Always use other indicators, and your own research, to confirm before buying or selling.

Each weekend, I study market behavior using sentiment and technical indicators. The goal is to use clues, observation, and indicators to determine if we are in a bullish, bearish, or sideways market environment.

JUST RELEASED: Understanding Options (McGraw-Hill, 2E), Understanding Stocks (McGraw-Hill, 2E), and Predict the Next Bull or Bear Market and Win (Adams Media): http://bit.ly/1bl0ZNk

 

AAII survey (6/18/2014)

35.2% Bullish. 24.1% Bearish. 40.7% Neutral.

Bearish: If sentiment is over 50% bullish.

Bullish: If sentiment is over 50% bearish.

 

Investors Intelligence (6/17/2014)

61.4% Bullish. 16.3% Bearish

Bearish: If sentiment is over 60% bullish.

Bullish: If sentiment is over 60% bearish.

 

VIX: 10.85 (on 6/20/2014)

Bearish: Less than or near 12.

Bullish: Greater than or near 40.

 

Moving Averages (daily): S&P 500 is above its 50-, 100-, and 200-day moving averages, and pointing up.

Bearish (Short-term Downtrend): Index crosses below 50-, 100-, or 200-day MA.

Bullish (Short-term Uptrend): Index crosses over 50-day, 100-day, and 200-day MA.

 

MACD (S&P 500): MACD is above zero line, and above its red 9-day signal line. (Note: I’m using the settings, 19,39,9, recommended by Gerald Appel, MACD’s creator.)

Bearish: MACD line crosses below 9-day (red or gray) signal line. MACD line (black line) crosses below zero line.

Bullish: MACD line crosses above 9-day signal line. MACD line crosses above zero line.

 

RSI (S&P 500): RSI is at 71 (on 6/20/2014)

Overbought (i.e. Bearish): When RSI rises to 70 or above.

Oversold (i.e. Bullish): When RSI falls to 30 or below.

Note: RSI can remain overbought or oversold for extended time periods.

 

Bonds: U.S. 10-year yield is at 2.62% (on 6/20/2014).

Note: 3.0% or higher is significant (consider selling bond funds as yield rises). 3.5% or higher and risk increases (for bondholders).

 

Analysis: The sentiment indicators are still in the exuberant stage, and will remain there until the market snaps. Professional financial writers are the most bullish, while retail investors are more neutral than bullish. I assume many investors will try and get out if the market goes south. The VIX is at historic lows, which reflects extreme complacency. RSI tells us the market is overbought and vulnerable to a pullback. And yet, the market continues to go higher (with a little help from the Fed). The trend is still up (which is why the bulls are so confident), but fewer and fewer stocks are joining the party. There are many danger signals even as the market climbs higher.

Opinion: Imagine how it must have felt like in 1929 when the market went up high and fast, the economy seemed to be on fire, and the financial experts of the day kept predicting the market was unstoppable. And yet, Jesse Livermore saw that fewer and fewer stocks were participating in the rally, and in fact were deteriorating. Livermore kept adding to his short positions, which caused him great financial pain, but he was certain the market was going to snap. Many days, while he waited for the day of reckoning, he went fishing. He said that it’s not hard to be right about the market. The hardest part is having the patience to wait until the market comes back to its senses. When the market finally broke in 1929, first slowly, and then with a huge crash, Livermore made more money than he ever did in his life. Even he was shocked by how fast and far the market went down.

In 2014, we have a market that is being talked higher by the Fed using a variety of tools and programs, some which we know about (low interest rates), and others we don’t know about. Last week, Janet threw a bit more gasoline on the market, and it responded with a 100 point rally (.73%). I found it interesting that the market did not have a strong followup rally. In my opinion, this market is running out of steam, although the Fed is doing everything in its power to keep the party going (with help from high frequency traders and financial writers).

Everything that I know about the market tells me it’s in trouble. Although I cannot predict the time or day when the first break will occur, it’s coming. The bulls have been lulled to believe the market is in a permanent plateau. The few bears that still remain are frustrated that the market seems unstoppable. One of my bearish acquaintances (who is not a professional) angrily said the market could remain levitated for years. Perhaps, I told him, but I don’t think so.

In fact, if you look at the Dow stocks, more and more are slowly turning negative. Like a game of Three-Card Monte, most investors are looking in the wrong place for the money card. Look underneath the hood, not at the “all-time” highs. For your information, the Nasdaq just made a 14-year high. On the other hand, volume is weak, complacency is high, the internals are deteroriating, and the herd is a little too bullish. It takes a tremendous amount of patience to wait until the market snaps. More than likely, the first crack will come out of nowhere. Until then, wait.  For me, being primarily in cash is the most prudent place to be. Keep in mind that most people, including most pros, disagree with me. They are all in.

This is a market that can lull you to sleep as it slowly climbs higher. It is deceptively dangerous because few realize their portfolios are vulnerable. The higher and longer the market climbs, the more risky it becomes. Margin will increase, the Fed will seem in control of the market, inflation will slowly creep higher, and the bubble will grow bigger.  Unfortunately for bears, this could go on for a while longer, so be prepared to wait.

Bottom line: This is not going to end well.

 

* Note: These signals are not actionable trades, but only guidelines. Always use other indicators, and your own research, to confirm before buying or selling.

Each weekend, I study market behavior using sentiment and technical indicators. The goal is to use clues and indicators to determine if we are in a bullish, bearish, or sideways market environment.

JUST RELEASED: Understanding Options (McGraw-Hill, 2E), Understanding Stocks (McGraw-Hill, 2E), and Predict the Next Bull or Bear Market and Win (Adams Media): http://bit.ly/1bl0ZNk

 

AAII survey (6/11/2014)

44.7% Bullish. 21.3% Bearish. 34.1% Neutral.

Bearish: If sentiment is over 50% bullish.

Bullish: If sentiment is over 50% bearish.

 

Investors Intelligence (6/10/2014)

62.6% Bullish. 17.2% Bearish

Bearish: If sentiment is over 60% bullish.

Bullish: If sentiment is over 60% bearish.

 

VIX: 12.18 (on 6/13/2014)

Bearish: Less than or near 12.

Bullish: Greater than or near 40.

 

Moving Averages (daily): S&P 500 is above its 50-, 100-, and 200-day moving averages, and pointing down.

Bearish (Short-term Downtrend): Index crosses below 50-, 100-, or 200-day MA.

Bullish (Short-term Uptrend): Index crosses over 50-day, 100-day, and 200-day MA.

 

MACD (S&P 500): MACD is above zero line, and above its red 9-day signal line. (Note: I’m using the settings, 19,39,9, recommended by Gerald Appel, MACD’s creator.)

Bearish: MACD line crosses below 9-day (red or gray) signal line. MACD line (black line) crosses below zero line.

Bullish: MACD line crosses above 9-day signal line. MACD line crosses above zero line.

 

RSI (S&P 500): RSI is at 61.36 (on 6/13/2014)

Overbought (i.e. Bearish): When RSI rises to 70 or above.

Oversold (i.e. Bullish): When RSI falls to 30 or below.

Note: RSI can remain overbought or oversold for extended time periods.

 

Bonds: U.S. 10-year yield is at 2.60% (on 6/13/2014).

Note: 3.0% or higher is significant (consider selling bond funds as yield rises). 3.5% or higher and risk increases (for bondholders).

 

Analysis: Last week, sentiment indicators were so extreme (overbought) a pullback was inevitable. Most sentiment indicators are still in the stratosphere, although they may come back to earth depending on geopolitical events. On the technical side, the trend is still up but there are signs this bull market is getting exhausted. Bullish investors believe the Fed will once again propel the market higher this week. They could be right because Janet should have soothing words on Wednesday (the Fed meeting). On the other hand, Iraq and oil could disrupt the market. This week, it’s a tossup what will happen as the signals are mixed.

Opinion: The market attempted to make another all-time high but took a hit as geopolitical events (i.e. Iraq) took center stage. Oil prices are rising and the world is watching to see what happens next. It’s a dangerous world and a dangerous market.

As I’ve written in a series of MarketWatch articles, the stock market is susceptible to a major pullback or correction. Because the market has gone up so high and so slowly, most investors believe it is unstoppable. The most bullish believe in the power of the Fed to save them by coming up with new tools and programs. The longer the Fed interferes, however, the more dangerous the market becomes.

I know this is hard for some bullish investors to believe but markets do not go up forever. Talking the market up higher at these levels (or tampering with the tapering) will cause unexpected consequences in the future. Instead of a correction, something far worse and unexpected could occur.

If you are bullish on the economy and the stock market, you don’t want to hear doom-and-gloom predictions. For five years, ignoring worst-case scenarios was a wise move as many of the most dramatic predictions were incorrect. Unfortunately, this is also why so many investors are so complacent. Many really believe the Fed (or their fund manager) will protect them from danger. When the inevitable correction comes, investors will be slow to react, or worse, think their stocks will bounce back quickly. That belief (that your stocks will come back to even) will damage many portfolios in the future.

In my opinion, the risk of the current market far outweighs the potential reward. Keep in mind that most people do not agree with me and are all in. After all, with the Fed’s help, this market bubble could continue to get even bigger. It could be weeks or months, but a monster correction (and bear market) is unavoidable.

As for me, I am not only out of this market in cash but also building short positions with inverse ETFs and some options. (Shorting is only for experienced investors who can manage risk. If you’re not experienced, cash is a comfortable place to be before a market crisis.)

Being patient and disciplined is the way to survive and thrive in this market. As the red flags and warning signs increase, prudent investors are taking profits or moving to the sidelines. To repeat, the downside risks far outweigh the potential gains. I might be wrong in the short term, but this market hasn’t had a correction of over 10 percent in more than two years. Complacent investors may think that’s normal, but it’s not. The clock is ticking, and it’s best to run for cover before the market comes back to its senses. Many investors are playing with fire right now, and most surprising, they do not even know it.

 

* Note: These signals are not actionable trades, but only guidelines. Always use other indicators, and your own research, to confirm before buying or selling.

Each weekend, I study market behavior using sentiment and technical indicators. The goal is to use clues and indicators to determine if we are in a bullish, bearish, or sideways market environment.

JUST RELEASED: Understanding Options (McGraw-Hill, 2E) and Understanding Stocks (McGraw-Hill, 2E): http://bit.ly/1bl0ZNk

My latest book, Predict the Next Bull or Bear Market and Win (Adams Media), is available on Amazon or any Barnes & Noble store. Here is a link to the book and sample pages: http://amzn.to/1h1rZZu

 

AAII survey (6/4/2014)

39.4% Bullish. 22.2% Bearish. 38.3% Neutral.

Bearish: If sentiment is over 50% bullish.

Bullish: If sentiment is over 50% bearish.

 

Investors Intelligence (6/3/2014)

62.2% Bullish. 17.4% Bearish

Bearish: If sentiment is over 60% bullish.

Bullish: If sentiment is over 60% bearish.

 

CBOE Equity Put/Call Ratio: .50 (on 6/6/2014)

Bearish: Less than or near .50 is bearish (more call options are being bought).

Bullish: Higher than or near 1.0 is bullish (more put options are being bought)

 

VIX: 10.73 (on 6/6/2014)

Bearish: Less than or near 12.

Bullish: Greater than or near 40.

 

Moving Averages (daily): S&P 500 is above its 50-, 100-, and 200-day moving averages, and pointing up on mixed volume. Nasdaq above its 50- and 100- day moving averages and pointing up.

Bearish (Short-term Downtrend): Index crosses below 50-, 100-, or 200-day MA.

Bullish (Short-term Uptrend): Index crosses over 50-day, 100-day, and 200-day MA.

 

MACD (S&P 500): MACD is above zero line, and above its red 9-day signal line. (Note: I’m using the settings, 19,39,9, recommended by Gerald Appel, MACD’s creator.)

Bearish: MACD line crosses below 9-day (red or gray) signal line. MACD line (black line) crosses below zero line.

Bullish: MACD line crosses above 9-day signal line. MACD line crosses above zero line.

 

RSI (S&P 500): RSI is at 73.25 (on 6/6/2014)

Overbought (i.e. Bearish): When RSI rises to 70 or above.

Oversold (i.e. Bullish): When RSI falls to 30 or below.

Note: RSI can remain overbought or oversold for extended time periods.

 

Bonds: U.S. 10-year yield is at 2.59% (on 6/6/2014).

Note: 3.0% or higher is significant (consider selling bond funds as yield rises). 3.5% or higher and risk increases (for bondholders).

 

Analysis: What a difference a week makes! In one week, the sentiment indicators went from mildly exuberant to extremely exuberant (i.e. that is a bearish signal). Remember that it’s possible for sentiment to remain overbought for longer time periods, but we’re definitely in the danger zone. If you look at the market trend, however, we’re going up, up, and away, which is fooling many inexperienced investors (and a few pros, too), who think they are looking at a healthy bull market. I know I’m in the minority but I must disagree. The uptrend is your friend in a strong bull market, but we also have low volume (danger sign), obscenely high margin rates, and fewer and fewer stocks making new highs. Investors who do not study market history or are greedy will buy blindly at these sky-high prices, and that is happening now. Bottom line: Strange things are occurring in the market, which tells me that something will crack (if you have the patience to wait weeks or months).

Opinion: As I mentioned last week, I am still getting emails from some readers who believe my advice to move to cash is “dangerous” and “irresponsible.” Others are angry that I would dare suggest that the bull market might end. A few sent me emails bragging about how smart they have been, and that I am “crazy” for not buying stocks right now as the market makes all time highs.

A note to those who think they are stock-picking geniuses: When a market is rising on low volume, when the number of stocks making new highs is shrinking, when the sentiment indicators are flashing warning signs, when too many people think the market will never go down, GET OUT. (I have to ask: What happened to the buy low and sell high strategy? If you follow this idea, you will not be buying stocks at these lofty levels).

I also do not understand why it’s “dangerous and irresponsible” to warn investors that the market is overheating. If I’m right, I have saved them money. If I’m temporarily wrong, they lost nothing but a few percentage points. They can always join the gravy train later when prices come back to earth. On the other hand, if you believe the market will go up indefinitely and the Fed will prevent a bear market, I have some tulip bulbs I’d like to sell you at outrageously expensive prices.

All the indicators I look at (including some proprietary ones that I don’t publish) are signaling trouble ahead. Most people do not have the patience and discipline to wait for the first snap (i.e. inflection or pivot point). When it comes, it will catch most investors, including many pros, by surprise. I believe it’s coming sooner rather than later, but so far it’s taking longer than I anticipated. I have the patience to wait, however, and I’m comfortable making 0 percent (or in the red with my short positions) as storm clouds appear.

Bottom line: Only you can decide how much risk you are willing to take. If you strongly disagree with what I wrote above, do what you think is best, and ignore my warnings. The next few weeks could be very interesting. As for me, I am looking to see if the sentiment indicators go even higher this week (that will happen if the market keeps rising).

 

* Note: These signals are not actionable trades, but only guidelines. Always use other indicators, and your own research, to confirm before buying or selling.