By John Del Vecchio and Brad Lamensdorf
The market is deeply oversold.
Sentiment is extremely bearish.
Recent price action in certain stocks suggests that selling is starting to get exhausted. The chart below shows the number of buying and selling climaxes using Point & Figure Charting.
The sell climaxes represent stocks that made a new low only to finish the week higher. They are in blue on the chart. The number of sell climaxes are now the highest since the COVID lows in 2020. That signal coincided with a huge run in stocks over the next year.
Obviously, with war breaking out in Europe, the market is digesting new information by the minute. Volatility is likely to remain high.
However, this signal does have significance. The number of sell climaxes may not predict the exact low, but it’s a reliable indicator to suggest that selling is exhausted.
At least for the intermediate term.
To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.
DISCLOSURE: LAMENSDORF MARKET TIMING REPORT
Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.
This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s. Active Alts is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader Past performance is not indicative of future results.