Monday, November 26, 2018 9:52:43 AM
Hi Allen,
Here's one component of my market risk indicator, Speculation. It measures indirectly how money is flowing through the markets. High speculation is visible when market gainers are greatly outdistancing losers and visa versa.
The apparent spike in speculation in early 2016 was a rebound effect from the very low level seen at the start of the year. The white lines represent the threshold of bearishness (above 20) and bullishness (below zero). This is the second week of a bullish signal for this component.
There is some seasonality to the Speculation Index in that tax selling has some influence some years. We're seeing some serious tax loss selling this year, it appears. Another aspect of Speculation is that it can persist as a bearish signal for far longer than one would think to be rational. Once the Lemmings start a stampede it's hard to turn them. This is also true of low speculation periods when everyone is selling and nobody is buying. Lemmings will be lemmings....
Here's one component of my market risk indicator, Speculation. It measures indirectly how money is flowing through the markets. High speculation is visible when market gainers are greatly outdistancing losers and visa versa.
The apparent spike in speculation in early 2016 was a rebound effect from the very low level seen at the start of the year. The white lines represent the threshold of bearishness (above 20) and bullishness (below zero). This is the second week of a bullish signal for this component.
There is some seasonality to the Speculation Index in that tax selling has some influence some years. We're seeing some serious tax loss selling this year, it appears. Another aspect of Speculation is that it can persist as a bearish signal for far longer than one would think to be rational. Once the Lemmings start a stampede it's hard to turn them. This is also true of low speculation periods when everyone is selling and nobody is buying. Lemmings will be lemmings....
Buy from the Scared; Sell to the Greedy.....
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