We Need More Fear
Impressive as the numbers may have looked in Wednesday's rally, when we peruse the first of the charts, below, it is apparent that this is, at least so far, no more than a partial retracement of the sharp drop of the prior three days. Perhaps more important is that the decline broke the ascending trendline coming up from the early June lows.
The observation of two days ago continues to be evident: The level of complacency is disturbingly high. That makes the five-day Arms Index chart show a bullish rather than a bearish reading. In other words, nobody was frightened by the slump. We need to see fear as a clue that a decline is overdone, and so far it is not happening. It warns of further weakness in the offing....307 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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