The trend remains negative for equities and is neutral for high yield. Investor sentiment remains extremely pessimistic. Such extreme readings are generally bullish for equites. We are finally seeing the oversold rally.
The S&P 500® Index is nearing its February high at 1947.20. The 50-day moving average line (trending lower) is currently at 1960. I favor establishing hedges on equity exposure in the 1925 to 1960 area.
Following are several rally targets (1, 2 and 3):
Overall, the major trend remains bearish and the market remains expensively priced. In last week’s “On My Radar,” I shared some stats on past bear market corrections that may help put the current indigestion into perspective. They are pretty interesting. You can find them here.
The current opinions and forecasts expressed herein are solely those of Steve Blumenthal and are subject to change. They do not represent the opinions of CMG. CMGs trading strategies are quantitative and may hold a position that at any given time does not reflect Steve’s forecasts. Steve’s opinions and forecasts may not actually come to pass. Information on this site should not be used as a recommendation to buy or sell any investment product or strategy.