SPY: Sentiment reset

IvanLabrie Updated   
In this chart I plotted the period following a sub 25% AAII bulls reading, followed by a sharp rise to 55% bulls at the peak in April 2021. We now reset back down to sub 25% this week, so we might be watching a 'coiled spring' situation in equities. This is not so easily seen in $SPY as the $AAPL performance as of late distorts how equities acted for the majority of people. I included the performance of my trading strategy in the period of rising sentiment, and during the last period with deteriorating sentiment. I expect to make outsized gains again as we get a period of steady trends once more. Note I actually caught the bottom in Nasdaq overall, but the gains from that outperformance round were retraced recently with a series of short term losses.

Best of luck, try to milk the good times ahead. Outsized gains away, potentially.


Ivan Labrie.

This fits nicely with quarterly and yearly T@M trends...

Weekly view, cleaned up the chart without the daily support levels.
Pretty sure the market bottomed.
Now it's a bottom. There's a very juicy trend setting up in financials once again, and value, as we get some reopening momentum thanks to the Merck pill news, paired with the evolution of Delta...The yield curve is sending a loud and clear message to buy these names. The sentiment reset makes for a great cue that we need to go hard and heavy into the next big market trend, which I think will be financials, energy, value, curve steepeners once again: the reopening trade.
Trade active
So far, so good...We've seen some incredible money making opportunities set up and materialize since I posted this. As expected.
Sentiment reset predicts periods of easy market conditions...so far, has been the case.
Last one we had big increases in our account value in stocks.
Now we broke into new highs again for the equities account.
AAII bulls has gone back to recent highs, but not to extreme highs, AAII bears, less than half way down from the recent top...There's room to go in both imo.
Before we reach a sentiment extreme on the other end of the spectrum.
Bears at 29% from 40%, and bulls at 39% from 22%.
On track...
So far it tracked this, but I'm concerned locally, given the recent turn of events, although rotations are better than an outright selloff in absolutely everything with rallying $VIX...

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