22Sep11:12 amEST

Lots of Bottom Callers Out There

So let me get this straight--Less than twenty-four hours after a much expected short squeeze rally after the FOMC reverse down hard to multi-month lows we now have a ton of bottom-callers out there this morning saying we are oversold and that sentiment is way too bearish?

Recall that, as we noted last week, sentiment analysis in bear markets should be different than in bull markets--We EXPECT sentiment to become bearish as part and parcel of all these rally attempts failing. 

Beyond that, how many market players (i.e. those with actual money on the line, like myself) are ACTUALLY pressing and expecting fresh imminent breakdowns in the software ETF, for example, seen below on the IGV ETF weekly timeframe. 

Note that descending triangle pattern highlighted the last 4-6 months, of lower high and flat lows. In the context of an ongoing bear market, this is often a bearish continuation pattern which resolves sharply lower. This is all happening at the pre-COVID crash highs, which means if this level fails we have that COVID crash air pocket below. 

Now, again, beyond sentiment surveys, how many people with actual money behind their words are pressing for breakdowns like these? 

Answer: Not likely nearly as much, nor anywhere close, to declare "everyone is bearish."

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