Sentiment model

Investors intelligence Bulls minus Bears is one of the best models at finding IT/LT tops/bottoms. Any move to 35 or higher is an IT top and if the LT is up longer term like 2003 to 2007 a drop to 18-15 area will send the markets higher to 35 again. Today the model is at 18 and should drop to at least zero to even think about a bottom. At this stage of the economic cycle, pre-recession, it will drop to -10 like it did in 2002.

If price drops below the yellow zone trend line at the 1350s price will continue on down to the red zone and the model will be at -10. The drop from 1500 targets 1330 at minimum by 1-19 so odds are very high 1350 fails and we will see the red zone by April. Sure glad Cows don't fly....

Best,
Larry

v interesting, thank u!

Thanks Larry. Do you expect we visit "low 1000" in SPX in the next year or so for a longer term forcast, or are you saying lower 1300 is about the lowest it will go?

Thanks Larry. Do you expect we visit "low 1000" in SPX in the next year or so for a longer term forcast, or are you saying lower 1300 is about the lowest it will go?

As you can see on the Sentiment model the 18-15 zone and price wise 1350 is the key. If 1350 is broken and we do get to 1330-1300 by Friday or next Tuesday then the red zone is the target with 1050 about as low as it will go this year. Year 2008 projected low is only 1309 so dropping below 1300 confirms the business cycle low that averages around four years did not occur in 2006, it happend this year no later than May.

LT

Thanks this is getting interesting. But with fundamentals getting worse by the minute and technicals catching up it seems we would be down in the 1000-1100 range this year or first part anyway. It will be interesting for sure.