Wednesday, November 11, 2009

S&P Price Oscillator Is Three Standard Deviations From Mean: 99% Outlier Market, this shows the market is currently over-bought. Selecto over at Traders-talk has posted this chart from Sentiment Trader

"When the Price Oscillator reaches an extreme, it often marks short-term exhaustion in buying or selling pressure. We generally use readings over 59% to indicate an excessive amount of buying pressure (particularly when in a longer-term downtrend), and readings below 41% to indicate that the selling may be overdone (especially when in a longer-term uptrend). This indicator works especially well within defined trading ranges, and will give a false signal (likely becoming very extreme) when a trading range is broken and a new trend begins." ... Sentiment Trader

Statistical overview:

68% of readings (1 standard deviation) should be between 41% and 59%
95% of readings (2 standard deviations) should be between 32% and 68%
99% of readings (3 standard deviations) should be between 23% and 77%

Latest readings have turned neutral (thanks to RogerDoger for this...

(as of 11/11/2009) 50%
Bullish: 38.62%
Neutral: 22.76%
Bearish: 38.62%

Nov. 5, 2009 AAII Sentiment is showing extreme bearishness, which usually means the market will go up. This is confusing as many of the momentum indicators are very weak, but this sentiment poll is very important which means that a second wind or a third bullish T as Terry Laundry recently wrote should unfold here.


  1. I'm still in the sideways to slightly up into early Jan.


  2. latest poll is showing an even split between bulls and bears now.

  3. Splits like that are usually seen near highs too. Wonder if this AM was it.


  4. sold longs and now short, fwiw. your april and may window now looks VERY dangerous!