Are We About To See Opportunity In The Stock Market?

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Despite recent recession, trade, and yield curve inversion fears, stocks are demonstrating a pattern of strength that has led to further upside.

For quite a while, we have heard that global economies are weak, that the yield curve is inverted, and that we are on the verge of economic recession. According to data from the, August saw multiple daily CBOE put/call ratios of over 1.25, levels that have been associated with intermediate-term market lows over the past two years. The site also showed close to 50% of investors in the American Association of Individual Investors survey bearish in August, among the highest level in several years.

In spite of this negative sentiment and concerns over everything from trade wars to oil supply disruptions, we have not seen any sustained selloff in stocks and, indeed, are hovering near all-time highs in many U.S. indexes. What is going on in the stock market?very interesting post from the MacroCharts site

finds an unusual degree of momentum strength among emerging market stocks. This is significant, because emerging market equities have underperformed their developed market counterparts for quite a while. According to MacroCharts, the percentage of stocks that gave buy signals across a number of markets hit unusually high levels. What this suggests is strength across a broad range of shares: a momentum thrust.

 

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If by “opportunity” you mean a “market crash,” then yes, we should see lots of “opportunity” in the stock market.

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