Capitulation to the Upside

By Michael Bond on January 31, 2018

We have never seen capitulation to the upside before. I don’t know what else to call it.

We’ve seen it near bear market bottoms, but never during bull markets. Even the Nasdaq-100, the greatest bubble of them all, did not go parabolic. It just climbed steeply to great heights. But the SP500 and the Dow bending upwards has never happened before.

capit

Pater Tenebrarum of Acting Man tells us that the DJIA hitting a 90 on the monthly RSI is unprecedented as well as the Daily Sentiment index of future traders (DSI) hitting 97% bulls and only 3% bears last week is not only unprecedented but the mirror opposite of the March 9, 2009 bottom when their were 97% bears to 3% bulls – the bottom!!!

So maybe with the most overbought conditions ever and the most bullish ever we should wonder who else is left to keep buying – Beuller Beuller Beuller.

The thing about capitulation on the way to the bottom is the market goes completely vertical at some point and sometimes takes several drops before the final bottom is in. So you never know.

You are welcome to join us at TSP & Vanguard Smart Investor

18 August 2015 interim update: “Market internals remain weak and have for some time. Aversion to risk as measured by credit spreads in the bond market have now reached levels that historically been met with significant market corrections”

14 December 2015 Special Timing Report: “…our risk aversion indicators are indicating a potential market crash anytime in the next few weeks…”

or just stick with wall street…

Wall Street ‘experts’ have missed every stock market crash in 20 years