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This post is only going to make half sense to you because you don’t know where I’m getting my data, but just for the moment accept that there is data. There where is really irrelevant, it’s the what do I do with the information that’s important. Today marked the 4th time that my proprietary selling pressure (indicating complacency) reached a certain key level. These levels are indicated by the 4 dates below. It only goes back this far because that is as far back I’ve been tracking this data so this is all we have to work with for now.

What I’m trying to do is decide what I can deduce from this information and it’s not a whole lot, but I still feel it’s somewhat important given the extreme sentiment readers we’ve been registering across many different sources for the past few weeks. In two instances below the market barely corrected and plowed much higher and in the 1.05 case, the market did suffer a 8% correction before eventually heading higher.

If I had to come to any sort of a conclusion (and trust me I am going somewhere with this) is that it matters what the market has down 4-6 months prior to the signal, so that one can determine how the market is going to behave after the signal.

If the market has been very strong and not paused properly, the first complacent signal may be a fake-out and could actually be looked at as a sign of strength in the market. … [visit site to read more]