SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Dexter Lives On who wrote (10525)2/18/2002 12:03:54 PM
From: Dan Duchardt  Read Replies (1) of 19219
 
Rob,

it's the correlation that interests me. In the extremes, it should be a warning sign of significant risk.

I would agree that as the ratio becomes more bearish, the risk of being short rises in the sense that if and when a bottom is hit, the bounce is likely to be more violent. This is the usual short squeeze train-is-leaving-the-station behavior seen at many bottoms. Tops tend to be rounded as people slowly come around to believing the market will not go higher. Bottoms tend to show sudden reversals as cash flows in from the sidelines and shorts cover.

I don't think you can go so far as to suggest that because bearish sentiment is high, or "higher than ever" the market must soon reverse. This market could head much lower, and bearish sentiment could rise a lot further before the bottom is reached. What the chart suggests is not that it has to happen soon, but that when it does it is likely to be an abrupt reversal, just like almost every other bottom reversal.

Dan
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News