|As the Sentiment Turns|
|Written by Jeff Hybiak|
|Thursday, 02 December 2010 04:01|
December has started with a bang. Last Wednesday we identified a Sentiment Shift going on in the market. A week later, it seems like the sentiment has shifted back to the "market can only go higher" feeling that was prevalent much of the fall. Have things really changed? Only time will tell, but the first thing we should do is look back at what was causing the negative sentiment to begin with.
Here is an update on some of the things that caused the negative shift:
So there you have it. Many items have fallen off the top of the mind of Wall Street traders for the time being. Nearly all of the ten items could prop back up as problems at anytime because they have yet to be solved. December is typically a positive month for the market, especially when the market was positive for the year on November 30. With the help of the Fed, money could flow heavily into stocks the remainder of the month as hedge funds and other portfolio managers chase performance into the end of the year.
We remain in transition mode as the tug of war between performance anxiety/Fed POMO money and the long-term structural problems plays out. Tread carefully and do not let the short-term action determine your long-term decisions.
NOTE: Whenever we are in "Transition" mode, which basically means there is no clear signal on market direction, all new accounts are left in Money Market. They will remain there until we receive either a buy signal or a sell signal with our remaining trading systems.
We first received the "warning" signal on November 9, so all new accounts since then are being managed, but the allocation is to be 100% in Money Market. Once we exit this mode either way, those new accounts will be aligned with the existing accounts in either the Bullish or Bearish position.
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