Overheating Economy And Inflation

Moving on to market sentiment, the percent of bulls has dropped way down in a couple weeks, but it still seems too high to me. Also, I'm thinking that after a period of about four months where sentiment was overly bullish and the market continued to rise, we need to see sentiment really bottom out before it starts to favor stocks again. So, from a contrarian point-of-view, I think sentiment continues to work against stock prices.

And speaking of sentiment, there were some comments I read this morning about sentiment towards bonds being overwhelmingly bearish, and this may mean that we are close to a short-term bottom in bond prices. Very interesting.

Outlook Summary

  • The short-term trend is up for stock prices as of March 9 (new uptrend).
  • Contrarian sentiment is unfavorable for stock prices as of Nov. 14.
  • The economy is in expansion as of Sept. 19.
  • The medium-term trend for treasury bonds is down as of Oct. 10 (prices lower, yields higher).
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Disclaimer: I am not a registered investment adviser. My comments reflect my view of the market, and what I am doing with my accounts. The analysis is not a recommendation to buy, sell, ...

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