Today’s Chart of the Day was shared on Twitter by Troy Bombardia (@bullmarketsco). It's a chart of the S&P 500 ($SPX) with a proprietary sentiment indicator below it. Troy points out that sentiment is excessively pessimistic even though the S&P 500 is above its 200-day moving average and less than 5% off of its all-time high. Sentiment tends to be a contrarian indicator, especially at extremes. Troy adds this great stat: "When sentiment was this low in the past while $SPX was above its 200dma, $SPX rallied 81% of the time one month later." This chart reminds me of something that respected Technician, Walter Deemer once said: "The market will do whatever it has to do to embarrass the greatest number of people to the greatest extent possible."
Chart of the Day - Wednesday, August 28th, 2019
August 28, 2019
