Jay is Senior Market Analyst at Sentimentrader.com and author of Seasonal Stock Market Trends (Wiley). Trader, writer, instructor and former CTA.
Illinois
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What does panic in the real estate sector have to do with the Nasdaq 100 Index? Um, yeah, that’s hard to say. In fact, maybe nothing. Still, the numbers are what they are. Make of it what you will. @sentimentrader
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The @Sentimentrader Micro Cap / S&P 500 Relative Ratio Rank 10-day moving average is below 1.5 for the first time in 3 months. Does it matter? History suggests that it might. A “Buy” signal? No. Favorable “weight of the evidence"? IMO, Yes.
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While I focus primarily on the trend "right now," this is an important lesson. Bottom line: DO NOT assume that above average stock market returns will continue over the next 10 years. Be prepared if and when the environment changes. @sentimentrader
Here is another way of seeing @MebFaber's question. The 13.9% annualized rate of returns for the SP500 (before dividends) of the most recent 10 years may not be what you get to see over the next 10 years.
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Motivation Monday...
baitdogsapparel.com/blogs/bl…
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Unleaded Gas took another run at a breakout...and failed. Am focused now on the side unless and until it closes at a new high. @sentimentrader
FWIW: Based on a surge in bullish trader sentiment, weak seasonality (which I have ignored until now), and a clear "Line in the sand" (at 3.4193), I am bearish on Unleaded Gas until further notice (or the line in the sand gets taken out, whichever comes first). @sentimentrader
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Jay Kaeppel retweeted
Stocks are near record highs, yet the Panic/Euphoria Model remains subdued.
Since the bull market began in late 2022, it has shown no sign of euphoria. That suggests a major long-term top has not formed. Breadth and rates still suggest near-term trouble.
Read full analysis: users.sentimentrader.com/use…
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The market is vulnerable short term IMO. Traders and those inclined to hedge, take note. But long-term investors might ignore all of this and focus on the major trend.
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People love to dismiss Utilities. BUT, opportunity is where you find it. Time to buy? Maybe, maybe not. Time to look more closely? Absolutely IMO. @sentimentrader
Utilities breadth has reached an extreme.
XLU’s 10-Day Sum Advance/Decline Ratio dropped from above 3 to below 0.32. In similar historical cases, XLU was higher three months later 82% of the time.
Read full analysis: users.sentimentrader.com/use…
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TCTM Risk Warning Model is bearish and Credit Default Swaps Index > 150dma. $SPX lower 18 trading days later 77% of the time. Average loss -6.2%. Suggests the market is vulnerable into mid-October. Maybe then a buyable bottom? @sentimentrader
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FWIW: Based on a surge in bullish trader sentiment, weak seasonality (which I have ignored until now), and a clear "Line in the sand" (at 3.4193), I am bearish on Unleaded Gas until further notice (or the line in the sand gets taken out, whichever comes first). @sentimentrader
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An excellent opportunity to invoke:
Jay's Trading Maxim #18: Follow the trend, but DO NOT fall in love with the trend.
Stocks are beating Bonds like nothing we've seen in over 50 years 👀
This is starting to get extreme.
It's stretched well beyond average, and the thing is, extremes don't last...
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This July 7 post is still operative. Especially given that QQQ just tried and failed (at least for now) to breakout. @sentimentrader
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Jay’s Trading Maxim #194: Trade the trend you see, not the one you “expect” to see. @sentimentrader
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After 2.5 years of favoring high-yield bonds, am now favoring floating rate bonds (also, no position in long-term treasuries since mid-2020). @sentimentrader
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Think sentiment doesn't matter? I might beg to differ.
@sentimentrader
@Sentimentrader Optix for $TSLA dropped below 1.4.
An automatic standalone "Buy" signal? No.
A pretty decent time to start looking for an opportunity to play the long side? Study the history and decide for yourself...
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Seasonality is climate, not weather. So no need to panic. Still, setting proper expectations is helpful at times. For example, October is often a good time to tread lightly in gold mining stocks. @sentimentrader
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Seasonality is climate, not weather. So no need to panic. Still, setting proper expectations is helpful at times - like late September, for example. @sentimentrader
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Jay’s Trading Maxim #60: No matter what anyone tells you, there is no one best way to trade. There is only the best way for YOU to trade. Your job is to A) Figure out what that way is, and B) Stick to it. (HINT: A is the easier part…) @sentimentrader
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International stocks have been outperforming U.S. stocks since the 1st quarter of 2025. That trend is now being tested. From an allocation perspective, watching this test closely. @sentimentrader
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Is the Real Estate sector oversold? Probably. Is there a compelling reason to jump in? Unless you are a hardcore bottom-picker, probably not, at least until it shows some signs of life. @sentimentrader
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