Monday saw an outperformance from the Communication and Technology sectors while rate-sensitive sectors such as Real Estate remained mired as underperformersare now looking overbought in our view. The CNN fear-and-greed measure is at recent lowsThe American Association of Individual Investors sentiment is also at a recent low as is the Investors Intelligence survey. The Market Ear also pointed out that Goldman Sachs's own sentiment indicator hit a noted low on Friday.
As mentioned Monday saw SPY go on a perfect leg lower to set a lower low in this current downtrend. That has led to many already anticipating a recovery rally and positioning themselves accordingly. Equity markets are already strong in Europe this morning and US futures too are positive.The Fed has yet to do its thing and we have some important earnings this week to get out of the way. Yes, positioning and sentiment are now overly loaded to the downside., but a move lower to.
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