Daily Stock Market Update & Forecast – January 10th, 2018

- State of the Market Address:

  • The Dow is now above 25,000
  • Shiller's Adjusted S&P P/E ratio is now at 33.30 Now at arguably the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
  • Weekly RSI at 88 - overbought. Daily RSI is at 81 - overbought.
  • Prior years corrections terminated at around 200 day moving average. Located at around 18,700 today (on weekly).
  • Weekly Stochastics at 98 - overbought. Daily at 93 - overbought.
  • NYSE McClellan Oscillator is at +11. Neutral.
  • Volatility measures VIX/VXX remains at suppressed levels. Commercial VIX long interest decreased to 50K contracts net long. 
  • Last week's CTO Reports suggest that commercials (smart money) have maintained their positioning.  For now, the Dow is 8X, the S&P is at 4X net short, Russell 2000 is now at 4X net short and the Nasdaq is net neutral.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the "smart money" is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


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