From NFTRH 843’s Sentiment segment:
Indeed, the market is resetting itself from over-bearish, should the play be another drive upward and potential bull blowoff. Note that the short-term risk summary is very skittish and probably shot into the red because of one bullish day (Friday). But generally, through the holidays dumb money sold and smart money started eating stonks.
If today is not a one-off, it appears that the upside blowoff option is gaining an upper hand. It is being led by the Semiconductor sector, which we have been on watch for in a leadership context, if the markets were to take another leg up.
Here is the SOX > NDX > SPX leadership chain today. It has the look of a consolidation breaking to the upside. In other words, after an extended correction in these cyclical indicators, a break to new highs appears doable, especially in NDX/SPX, but SOX/NDX and SOX/SPX may well get a move on here. That would go well with our option of an upside blowoff in the broad stock market, and if I am wrong about a coming top amid a contrarian bearish setup, an extension of the bull market amid “America great again”.
But for now, we watch for the indications of a new bull leg up after the sentiment cleaning of the last few weeks.
