Has the S&P Bottomed?
Posted on 01/06/15
The last five trading sessions have not been kind to S&P Bulls, as the market is down approximately -4.4% over that period of time. Tonight, S&P futures are trading about +0.8% above today’s low. So, has the market bottomed? Before you go piling into new long positions, consider the following:
- S&P sentiment decreased from 34% to 22% Bulls on 01/06/15
- S&P is now 22.2% Bulls below its sentiment 5 SMA (44.2% Bulls)
- Since 2006, S&P was >20.2% Bulls below its sentiment 5 SMA seven other times
- Dates: 05/17/06, 02/27/07, 03/02/07, 03/05/07, 07/26/07, 07/27/07, 05/06/10
- S&P futures made a new low 71% of the time (5/7) within two trading days
- S&P futures made a new low 100% of the time (7/7) within 13 trading days
- Odds favor $ES_F to trade below 1984.25 by January 23rd, 2015
Even though S&P has traded sharply lower over the past five trading sessions, the sentiment data suggest we should see new lows over the coming days. If you’re looking to get long for a bounce, it appears as though you’ll have a better entry-point sometime in the near future.