It's in the pre-selloff zone (45%-55%) where it tipped off the dives at October '07, May '08, and September, '08. If you compare the AAII chart with the S&P above it, and consider the slowly rising wedge formation bearish in the context of a bear decline, you see these formations leading up to each of these major downlegs. We are currently near the end of yet another of these formations.
All this would indicate another major selloff next. But at some point, there will be a reversal of this continuing pattern (it can't go to zero) and a sharp multi-month rally occurs. But will it be from here or from lower? One of the things I am watching is which way that wedge formation breaks.
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It's in the pre-selloff zone (45%-55%) where it tipped off the dives at October '07, May '08, and September, '08. If you compare the AAII chart with the S&P above it, and consider the slowly rising wedge formation bearish in the context of a bear decline, you see these formations leading up to each of these major downlegs. We are currently near the end of yet another of these formations.
Jan 10 12:12 pm
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All Comments by Bruce Pile »Investor Sentiment Shows Improvement [View article]
All this would indicate another major selloff next. But at some point, there will be a reversal of this continuing pattern (it can't go to zero) and a sharp multi-month rally occurs. But will it be from here or from lower? One of the things I am watching is which way that wedge formation breaks.