The Week Ahead: This Market Could Hurt Stocks

By Tom Aspray, Contributor The wide market swings of the past eight days in the stock market have likely scared the average investors and kept them from buying stocks. This will keep the public’s participation in the stock market at low levels. This is not surprising as many professionals are also likely confused as they wondering whether they should be buying or selling.

Just a week ago, the sentiment in the financial media was decidedly negative with only a few of the longer-term value oriented analysts interested in buying. Several well known analysts proclaimed a new bear market was underway. With Thursday’s sharp gains, the consensus now seems to be that the market’s correction is over.

The Fear & Greed Index that I reviewed in early August’s Are the Fear Levels Really That High? is now at 13, which is an extreme fear reading. Back in August, it was even lower at 4. I have not studied this enough to be convinced that this is a contrary indicator but the low reading in August came just after a round of panic selling.

Clearly, there were signs of panic liquidation on Wednesday, October 15 as the Spyder Trust (SPY) dropped to a low of $181.92 before closing at …read more

Source:: Jevin Sackett Recommended Forbes Articles

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