MARKET SENTIMENT INDICATORS: Bearish
Our Major Market Indicators fell further into bearish territory for the second week in a row at the end of January 2015. The S&P 500 fell to 1994.99, down 2.8% for the week. The Dow Jones Industrials were down 2.9% and the NASDAQ retreated 2.6%. This week the MMI fell to 48.33 from the prior week’s 49.00, continuing the trend of bearish readings. Below, the weekly graph of our Major Market Indicators shows the trend over the last few months.
In summary, our MMI score moved down further into bearish territory to 48.33 this past week. Bearish components in the MMI include the market sentiment, technical and liquidity factors, with valuation and monetary policy categories bullish, and earnings momentum at neutral. Last weekend we computed the first bearish signal for 2015, and the market “rewarded” us with a significant sell-off. Since the major market indicators continue to flash a bearish signal we urge investors to adopt a protective posture.
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