I'm probably one of the best at looking at sentiment in novel ways to find a useful edge. It's a knack I have. I don't think this is an arrogant or controversial statement to anyone who has watched my work since I took over the Fearless Forecaster survey from Carl Swenlin back in the 90's.
So, bear with me as I explain an observation. We know, from years and years of running our Actual Position Poll, that this crew is almost ALWAYS leaning hard in the right direction at meaningful tops and bottoms. Not every little swing, of course, but for worthwhile moves. It's actually uncanny.
Unfortunately, we also lean heavily short when there's more upside. We're top pickers too. So, that lean doesn't LOOK predictive. But looks can be deceiving. If we look at the "Negative Space", suddenly, we can get an actionable edge.
Yesterday (and the day before), at the highs, we had relatively few Short Bears. That tells us with relatively high confidence that the top is not in. So, we're down yesterday and today. We know with a high degree of confidence that we're going to revisit the highs. In a Bull market, that usually means sooner rather than later, so we know that there's going to be buying pressure. We should be buying support today (and yesterday) and likely Monday, because we're nearly certainly going to at least see if not break above those highs.
How often do we get to say, "almost certainly" in the stock market?
