– State of the Market Address:
- The Dow is back at 25
- Shiller’s Adjusted S&P P/E ratio is now at 32.83 Off highs, but still arguably at the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
- Weekly RSI at 58 – neutral. Daily RSI is at 47 – neutral.
- Prior years corrections terminated at around 200 day moving average. Located at around 18,900 today (on weekly).
- Weekly Stochastics at 56 – neutral. Daily at 83 – overbought.
- NYSE McClellan Oscillator is at -10 Neutral.
- Commercial VIX interest is now 15K contracts net short.
- Last week’s CTO Reports suggest that commercials (smart money) have, more or less, shifted into a bullish positioning. For now, the Dow is 2X net short, the S&P is at 3X net short, Russell 2000 is net neutral and the Nasdaq is now 3X net long.
In summary: For the time being and long-term, the market remains in a clear long-term bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead. Plus, the “smart money” is positioning for some sort of a sell-off.
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