When markets rally strongly almost everything goes up with them. That has certainly been the case with this current rally. Over 90% of stocks in the S&P 500 Index are above both their 50 and 200 day moving averages. So if you’ve been making long trades you probably feel like a genius. Of the stocks well follow and trade with Twitter sentiment almost every long trade with the trend over the last two months is in positive territory. This is what happens in fast moving up trends so we’re not patting ourselves on the back. We know that a pull back will happen eventually and the success of our trade signals will eventually be tested by lower prices. Today’s price action in the major indexes hints that we might finally be getting the price reversal that many bears have been waiting for. With that in mind we thought it would be a good time to show some of the long trades that we’ve mentioned on Twitter @DownsideHedge over the past
Below are the intensity scores for the 25 most active stocks on Twitter for the past week and month. Here is the status of the 50 most active stocks on Twitter. 70% have Twitter sentiment reading that confirm bullish chart patterns. Very few bearish stocks over the past week.
We first wrote about the canaries in the coal mine that were warning of a correction in February. As recent as last week the canaries were still warning. Not so any longer. The canaries lived. Most of the time when a market gets thin at new highs a correction follows, but once in a while the thin market resolves itself with rotation. That’s what we’re seeing now. The defensive sectors that have led all year are starting to under perform the broad market and the stocks that have lagged are being bought. Our Twitter support and resistance levels had pegged 1600 on the S&P 500 Index (SPX) as the most important resistance we’ve seen since we started tracking it. There were a huge number of tweets that targeted that level. The rotation in stocks since the break out above 1600 highlights how important that level was. People who were defensive are starting to trim those positions and others who were under invested are buying technology, financials, and industrials. Even the
Below are charts of the bullish intensity for the most bullish stocks on Twitter over the past week and month.