Stock market: green baby, green! [w/ edit]

[edit] Well, that didn’t last long. Still, the potential remains in play from a sentiment POV.

The stock market looks to open green today

If you want to read all about it, you can click the image above.

Okay, calm down. It was in the cards, short-term. From NFTRH 721:

Sentimentrader’s Smart/Dumb money indicators agree [with a premise that preceded]. Smart money ate the market last week and dumb money puked it.

Check out how aggressively investment managers (NAAIM) barfed the market even before the week ended on its down note. Turns out they were once again good predictors of a down move to come. Indeed, NAAIM have jerked southward even more strongly than stock prices and this is another indicator advising that the market can bounce in the very short-term. But the trend is down and in that, NAAIM are not contrary indicators. It’s a view of bursts of enthusiasm and bouts of depression in a bear market.

Investors Intelligence (newsletter writer survey) and AAII (individual investor survey) each pulled back as well, with AAII spiking hard down similar to ‘dumb money’ and NAAIM above.

With the seasonal turning negative by mid-September it would be logical for today’s sentiment setup to lead to a bounce into mid-month and an oncoming FOMC that is not pretending it wants to kill inflation. It needs to kill inflation or die trying.

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