Related Topics
Stocks , Investing
Share This Page         

S&P 500 Index: Clear Signs of an "Ebbing Ebullience"

How sentiment measures serve as useful aides in evaluating the stock market

by Bob Stokes
Updated: August 15, 2019

Investor psychology is so important that EWI publishes a section on the subject each and every month.

This chart and commentary is from the section found in our July Elliott Wave Financial Forecast:

EbbingEbullience

There have been wide market swings since [the January 2018 top]. The back-and-forth nature of these moves over a months-long time horizon appears to be weakening investors' bullish intensity. The middle graph on this chart shows the Daily Sentiment Index (courtesy trade-futures.com), which surged to 96% bulls on S&P futures just days prior to the peak in January 2018. The highest reading in [the current wave] so far is 91% in early April. The Rydex Total Bull/Bear Ratio is another sentiment indicator that EWFF showed in January 2018, right at its all-time high... A recent high of 25.4 on May 2 is slightly lower.

So, our analysis was anticipating that the weakening in "investors' bullish intensity" would persist. Hence, expect downside action in stocks just down the road.

The S&P 500 index hit 3026 on July 26, a record high. But, in just six trading days thereafter, the benchmark had surrendered 6% of its value, closing at 2845 on Aug. 5. On that date alone, the index lost 3% of its value. As you probably recall, the DJIA had plummeted 767 points.

Yes, the S&P regained a lot of ground, but then another deep stock market dive followed on Aug. 14.

As I'm writing this, the S&P 500 is trading well below its June 28 level (2,942), the date when the Elliott Wave Financial Forecast warned of an "ebbing ebullience."

Now is the time to find out what our analysts expect next for U.S. stocks.

You can do so risk-free. Look below to find out more.

Is MAJOR Volatility Dead Ahead?

Well, since January 2018, there have been wild swings in the stock market.

If our long-term Elliott wave forecast is correct, there may very well be even bigger price swings in the next couple of years.

Now is the time to prepare for market moves that will take most investors by complete surprise.

Get up to speed by reading our Financial Forecast Service, risk-free for 30 days. Learn more just below …


Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:

 

1

Subscribe now and read the current issues within FFS.


 

2

Fine-tune your portfolio plan.


 

3

Relax. Watch the markets with your targets in mind.




Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns


Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:



Here's what you get with the Financial Forecast Service


Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

Three Days Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.


You can be ready for risks and opportunities that catch most investors by surprise


Risk-Free, Start Your Subscription Now

$69

for 1 month of unparalleled market insights