Well…they did it again. “Investors” managed to register GREED level sell signals in the face of the MOST dangerous fundamental backdrop of our generation. I’ll repeat this again. Simply talking about being fearful is not the same as BEING fearful and unless and until this FED and this Treasury Dept. allow investors to experience some sharp, deep, pain, we’re NOT going to create the impact that is needed to create a decent low.
I told you all many weeks ago, after a whole new crew of bottom-pickers were rolled out on TV and in the press, that—even ignoring my proprietary model and looking at common-sense battle-tested Fear/Greed indicators—it was easy to determine that the July low was nothing more than a VERY temporary low that would be taken out…maybe violently.
Over the past several years, whenever the TRIN has registered a reading as low as the reading registered on 9-15 (the 7:30 hourly bar) the market had traded down or sideways for 8 to 16 sessions. (Because that reading registered as a “BUYING PANIC” and what we need is a BIG upside spike in the TRIN in order to register a “SELLING PANIC.”
Bottom-line, fear is good, fear cleanses, and we NEED FEAR to form a tradable low. The constant interventions are creating a very unhealthy amount of complacency out there and at some point we’re going to have to pay the piper.
Best case for the bulls, our economy and financial markets around the globe is a 1200 point consolidation range between 1133 and 1300 but their not even going to get that if they don’t capitulate a bit and with the worst-case scenario a 45% crash during October I sure hope they capitulate quickly.
Remember, we have that air-pocket between 1131 and 944 so maybe they can plunge to 944 and make them capitulate. That would be a gift compared to a 45% crash.
Full report coming soon