On July 15th I posted the BAM Model’s very bearish outlook for the global stock indexes and since that time very little upside progress has been seen. This type of upside shopping/topping action is referred to as an “inversion” per our work and during these periods the model tells us to not only exit shares of stocks, but to sell-short shares or to even buy 3x leveraged bearish vehicles like $SDOW $TVIX $UVXY $YANG $RUSS (etc.)
In other words, the global stock markets are even more bearish today than they were back at the July TOP. (And keep in mind that the very broad NYSE Composite Index topped way back in June of 2015– a terrible sign if you follow the underpinnings of the supposed bull market)
Today I shared a statistic with Twitter followers that highlighted an emotional trigger system that seems to work very well at stock market extremes. That trigger system is a simple “open rate” of the emails that I send out to paid subscribers each and every day.
Here’s how it works:
The threshold/ trigger that I’ve found to be very useful defines a 95-100% open rate as “high” and a 20-40% open rate as “low.” High open rates tend to appear at market BOTTOMS (when bullish subscribers are concerned about stock prices and bearish subscribers are elated) and low open rates tend to appear at market TOPS (when bullish subscribers are unconcerned about stock prices and bearish subscribers are dejected.)
Recently, I have had two record low (open rate) triggers hit– one on July 20th and one on August 11th and my conclusion–when combined with all of the other bearish data the Behavioral Analysis of Markets Model has been generating–is that we are on the verge of a cascade decline that would see prices attack the February lows as we trade into September.
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