Tuesday, November 04, 2008

Narrow mini-trend

The S&P 500 index has been trading in a narrow rising wedge pattern for five trading days now, and has gained almost 20% since its intra-day low of 840 on October 10. Optimism is steadily increasing in the sentiment indicators as well, so I think this is setting up an opportunity to invest in GRZZX and make money on the next slump.

p.s.: I will let readers know here when I buy GRZZX.


jolly_rancher said...

Is it possible that bullish and bearish sentiment don't sufficiently capture the human psychology of the market? Perhaps people are bullish here but still too afraid to invest because of recent punishment. So a simple poll fails to capture that. A large sampling of newsletter/investment advisor advice does capture that because it shows what is being advised. But it doesn't show what people are actually doing (including the investment advisors). Cash levels is a pretty good way to get an idea of this. So I guess if we see bullish sentiment rising but cash levels remaining low, we know that investors are frozen by fear and we can say a bottom is in. But where to we get this cash level data?

Just an idea. Have a great day.
Jolly Rancher

Jody said...

I don't use polls or newsletter surveys, because, as you suggested, people don't always put their money where their mouths are. I only use data about actual bets made with actual money.

wooderson316 said...

As you posted earlier, as soon as trends are made, they are broken.