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Weekend Stock Market Analysis

(11/9/13)

Bearish Sentiment has dropped back to around the 15 level so there is an extreme amount of complacency in the market.  The last two times the Bearish Sentiment dropped back to the 15 level (points A) corrections followed shortly thereafter.  In April of 2011 when the Bearish Sentiment got near the 15 level a 300 point correction followed in the S&P 500.   Meanwhile further back in early 2010 a 100 point drop occurred after the Bearish Sentiment reached the 15 level.   

 

Considering how overbought the market has become an eventual retest of the longer term upward trend line (green line) from the March 2009 low would be a potential target as move into 2014.  In addition the 23.6% Retrace from the March 2009 low to the recent highs also would come into play as well in the lower 1500's.   Keep in mind they may keep the market from selling off too much through December however as we move into 2014 that will likely change.   

 

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