By John Del Vecchio and Brad Lamensdorf
Could a short-term bottom be in right here? The Short-term Composite Indicator, produced by Investors Intelligence has dipped to 8.6. Previously, we had warned that the market was overbought and due for a quick pullback. That move has now happened.
If there is a cascade effect to the selling in the market, the indicator could stay pinned here for a period of time. Another bad day for stocks could take the indicator down to 5, which was a buyable bottom last time in September. Right now, we are in wait and see mode.
Market sentiment is starting to turn bearish however, it has not shifted enough for a long-term bottom.
Some reduction in hedges may be warranted here as a preliminary move. Either way, expect greater volatility for the foreseeable future.
To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.
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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.
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