I1 bottoms this afternoon and begins a run up to above 5 on 2/22 and another run to above 8 on 3/25. These are formal buy signal levels, so I have to shift my sentiment to the bullish side. The technical composite still has not reached -24, the formal buy signal level. If stock indices break down out of their trading ranges of the past 5 days then we could see critical support fail at 11,514. I don't expect this to happen. However, breaking this level would change my tactics and prevent me from going long. If this level falls then I will keep crude and gold shorts, otherwise I'll cover them at the close. Regardless, I will sell SCO at crude 86.60.
The PM1 forward sentiment gauge is correlated with precious metals but is based on similar inputs as I1. The longer view is bearish through February, but a short-term bottom occurs Wednesday.
As a footnote, even though the dollar index sentiment gauge is bullish for the next month if the stock market does rally then that would probably keep the dollar in a broad trading range.
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