Chris and Nicole Petallides explore investor sentiment

INTERVIEW DISCUSSION POINTS:

• The lack of fear amongst investors is clearly today’s investor sentiment.
  • The low put/call ratio tells us the majority of traders are buying leverage betting on higher prices.
  • Bonds and utilities have been trading flat with no one thinking they need any downside or defensive protection in their portfolio
  • Everyone is focused on buying tech (XLK), discretionary (XLY), and biotech stocks (XLY), and ignoring economic sectors like energy (XLE), and Financials (XLF), airline sector (JETS).
• Based on Chris’s blended cycle analysis, we should see the market struggle and trade lower for another 8-10 trading sessions before finding a bottom and potentially rallying to test all-time highs.
• If we continue to see the US dollar and bonds start to move higher this week then traders should prepare for stocks to pull back another 4-7% from this level. This is generally an early warning sign of near term weakness in stocks.

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