This may seem like heresy to the majority of bears here, but I’ll just throw this out and let you perform your inquisition.
We may be getting closer to a near term bottom. There, I said it.
I emphasize near term, because fundamentals are not even close to supporting an “all clear, hands on deck, buy, buy, buy” scenario.
Still, I remain bearish on the market, until I become bullish. It’s a Zen thing.
Yesterday, the NYSE Bullish Percent moved closer to the magically oversold level of 30%. It now sits at 32%. For all you newbies, the Bullish Percent indicator is a measure of market sentiment. It measures the percentage of stocks that are on buy signals based on Point and Figure (PnF) charts.
As you know, I start to look at opportunities to go long when the Bullish Percent dips below the 30% level and crosses it again on the way up. By crossing back above the 30% level, it typically signals a major shift in market sentiment that can develop into a trend and be sustainable for a period of time.
In addition to the NYSE Bullish Percent, the OTC Bullish Percent is now sitting at the 30% level after yesterdays action. On top of all that, the percentage of OTC stocks that are trading above their 10-week moving average is now only 22%. This may set up an interesting scenario where the OTC may lead the charge to get the market out of it’s funk. Hey, shit happens.
In the meantime, I continue to sit in cash (59%) half of which is allocated to the Australian Dollar via [[FXA]] and the Canadian Dollar via [[FXC]]. Both the Aussies and Canucks have commodity based economies whose currencies continue to waylay the dollar. I’m also nursing my 10 focus stocks, my commodity and inverse ETFs and my [[MA]] short. At this point, I’m not adding to anymore short positions (via stocks or inverse ETFs) unless on small rallies, and if so, will set stops pretty tight.
The current trend is still down, but I’m starting to plot a course for when sentiment changes, thereby accumulating more coin for the vault, egregiously of course.
You see, many simpletons true to form, simply “stick to their guns”, whether bullish or bearish, stubbornly clinging to their opinions. Then the market says, “fuck it, I’m going to Constanza your ass”. Then out come the hickory axe handles, and the simpletons get waylaid unexpectedly, “Walking Tall”-style.
In closing, to perfect our craft, we all must take heed and listen to the voice of the market, measure it’s pulse, and finally ride it’s coattails all the way to the bank, whether in a bearish or bullish posture.
Be well, do good work and keep in touch.