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Strategies & Market Trends : Classic TA Workplace
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To: John Vosilla who wrote (169744)7/15/2008 11:53:03 PM
From: gregor_us  Read Replies (1) of 209892
 
The perceived discrepancy between price action and sentiment might be explained as follows: the US indexes in foreign currency terms never exited from the bear market of 2001-2003. Those highs we made in 2007 were nominal. Not real. So at this moment, sentiment measures are hugely negative while at the same time many observers wait on the sidelines for a Fear Spike as measured by VIX. Or, they wait for "lower prices." That fear spike may not come. And here's why: in foreign currency terms, we are not in a new bear market. But rather, in an old bear market. And the current print of 1214.00 SPX is not an initial low. But rather a very deep, severe, and devastating low. A low that represents a tremendous loss of wealth and purchasing power. The purchasing power of INDU or SPX has been ravaged. The II Survey comes out overnight tonight. I think there's a good chance it may show a truly astonishing Bull-Bear spread--negative. Last week, it was already showing sentiment levels that were seen around the 2002/03 lows, 9/11, and the LTCM and Asian Financial Crises. I agree with you. Everyone is waiting for the full market puke, in price action. But I wonder that we have had the puke 3 ways already: 1. In the financials. 2 In sentment. 3. in real (price) terms.

That's my best guess!

Gregor

stockcharts.com
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