MARKET COMMENTARY by Woody Dorsey:
The Sentiment for 12/2 is 93% Bullish, In general it is never a good idea to Buy on High Sentiment. We have seen that every extreme cluster of Low Dorsey Sentiment has been an ideal time to Buy. However, it is little recognized that High Sentiment and Low sentiment are materially different in that they represent different aspects of the Emotional Market Brain. I had surmised that the “Seasonals would NOT be typical this year. Yesterday’s trade was confusing as Sentiment, Timing, and the Technical form of the market are at odds. At any rate, I wanted to alert you to the 93% Bullish.
Note that there is a difference between a “Forecast,” a “Trade” and. “Risk Management.” Risk Management via Stops can provide an exit to a Trade but may not alter a Forecast. One can have a Forecast without taking a Trade. I am aware that Stocks are structurally vulnerable but that Idea can be dangerous and may not be an appropriate Forecast if it induces one to put on a Big Trade without any Risk Management. The Market looks good to many investors but a hypothetical down day of 300 Dow points on Friday would change that. A great deal can happen quickly or nothing may happen at all. Thus overall, this is not the time for Big Positions and one may not want to let the market overly influence how one is thinking about it or, Forecasting it.
MARKET TIMING: The overall timing pattern suggested Recoveries towards Thanksgiving before some downside attempts into December 7-10. I focus this research morality on the short term vibrations of Stocks. However, I study all Time frames and all Markets as well. What is interesting in these days and weeks is the role that the Dollar and Commodities are playing. The monthly charts from Treasuries to Gold to Grains actually explain what is going on. There are very large scale influences unfolding which are taking plenty of time to play out. A big market change is coming and big opportunities are coming but not yet. Don’t be seduced by Complacency…. It may even get worse.
MARKET SUMMARY: Stocks are in some sort of rogue trading pattern. Today’s 93% Bullish may lead to surprising setbacks, particularly into next week. Even though stocks are not trading as ideally expected, there are still indicants for weakness specifically on 12/7ish and 12/10ish. Still with the ECB meeting and the Jobs Data looming, Volatility spikes both ways can yet occur this week. Thus, this is not the time for Big Bets and Out-sized trading positions.
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Information is for paid customers and may not be copied or distributed Copyright 2015