What the statistics say for similar index declines and what can we expect?

06.02.2018 / 14:41

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If the statistics to be true once again, the bears are weakening and the bulls are still prevailing. The graph compares the price movement of the SP500 and the movement of the Bloomberg Greed Indicator, which measures the sales force and the power of purchases of assets included in the SP500. The indicator now reflects just one thin spike, or in other words, the sales force is extremely low. Looking back over time, such a decrease was recorded in 2016, and SP500 rose 17% over the next few months. The indicator shows the mood well enough, and it is appropriate to pay attention to such downsides. If stocks do not recover, the likelihood of Bloomberg Greed Indicator to remain on red territory is rising. This will mean that investors will tend to sell more than to buy, and statistics show that after such periods the markets either adjust or enter into consolidation.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

Varchev Traders

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What the statistics say for similar index declines and what can we expect?

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