Archive for the ‘Sentiment Indices Romania’ category

The March Reversal

INVESTORS - 1 month term expectations

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INVESTORS - 6 months term expectations

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EXPERTS - 1 month term expectations

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EXPERTS - 6 months term expectations

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Confidence in achieving personal targets on BSE over the next 6 Months

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STOCKS VS CASH - Current amount invested in stocks (% from total available)

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source: prognosis.ro

The March Reversal - 14 Mar 2011

We are in March, which marks a 24 month anniversary for the bull market that started in 2009. Though there is no rule that says that after 24 months prices should correct for atleast a few weeks. But markets continue to point to multi week exhaustion before we restart the next leg of the bullish trend.

We anticipated the March reversal 2009. One reason why 2010 was a low return year was also because of the March reversal. Now we are in 2011 March.

The history of BETFI and March has a good accountability. Barring Mar 2004, all the other 9 march reversals delivered in terms of a reversal in trend or atleast a few months of pause. Pauses from a previous continuing trend are also considered a reversal.

Now that we are in March again, the previous trend should reverse. The previous trend since May 2010 has been flat and stagnating. Above this RSR readings are at bullish extreme both on monthly and half yearly readings, a topping sign. Even momentum readings are also overstretched.
We continue to look at a market pause or negativity from current levels for atleast a few weeks before sentiment and the bulls reemerge.

Is the fall over? - 10 Feb 2011

After the fall comes bottoming and bottoming can take weeks and maybe months. Accumulation is different from buying. It’s a slow buying process, where you wait for a price to come and you generally don’t run after the price. When do we accumulate? We can accumulate when prices are bottoming, as bottoming process can be long and may take a few weeks to few months. We also accumulate because we see value that we are willing to hold for longer term of 12 months to 36 months.

Now before we accumulate, the question to ask is whether the fall is over? RSR readings have not swung to the other extreme, so there seems to be more left on the negative side. We expect the readings to bottom sometime in or after March. As we move into spring, the sentiment might be at an extreme low and create real low and attractive value.

However, sector rotation suggests that some stocks and sectors might already have reached their bottom values and selected stock picking should begin. Our favorite stocks are Condmag, TLV and BRD.

Time to Fall - 10 Jan 2011

“You might say, Mukul for one time, at least make us happy. Tell us everything is good and worst is behind us.”

Our job at Prognosis and Orpheus is to be objective, even if you call us incorrigible contrarians. And above this we are following clearly defined rules. When RSR is at the top we sell and vice versa. Now the RSR has reached historical all time highs on monthly and 6 monthly readings. Even the confidence Index is heading to a new high. This has never happened.

So even if our larger secular view remains intact, these are not the prices one should enter. Whether markets fall for a few weeks or a few months, the correction should create opportunities to accumulate for long term, but not now we are looking lower.

There is another reason RSR reading are valid, sensitive and sharp. Just like RSR is suggesting a sentiment top, volatility Indicator VIX is suggesting the same, an extreme complacency. We have a consensus on VIX and RSR and that says “It’s Time for Equity to Fall”.

Let’s See.


Santa Claus Rally

RSR readings of a month may not the best tool to predict an end of the year rally also called as Santa Claus Rally, but they definitely tell us how sustainable any rally is, going ahead into 2011. The rolling 6 month sentiment  remains overextended and topping. This tells us that any bounce backs should remain weak going into 2011. This puts any Jan first week rally doubtful.

Markets have an ability to trash general beliefs. One of the belief was that year ending in 10 are negative. The whole year has come to the 10% upside on Dow Jones and BET. Whether markets end the year negative or not remains just simply statistics. Such small changes throughout the year makes it a stagnant 2010 and not a positive or negative year.

What did the year teach us? It teaches us that just like buying into sentiment low in Mar 2009 was an opportunity, it was the Jun-July RSR sentiment readings low in 2010. It also tells us that extending 6 monthly sentiment does not make an accumulate case just yet.

Markets will always test patience. They will always fall asleep tricking you into doing the same. They will always move faster than you when they trend. Understanding market means time efficiency. If you don’t understand time, you may always be running in a labyrinth you can not solve.
Enjoy the latest Sentiment Review.

The global sentiment

There is not many conventional ways to explain why a small eastern European Country sentiment can have a bearing on the global sentiment. It was the Romanian Sentiment Review with it’s valued survey respondents (we thank you again) that held the key to global sentiment.

This is what the survey readings mentioned on 13 April

“Now if we look at Romanian markets, its not just RSR readings but classic conventional momentum that suggest extremes. Internet bloggers have already started getting vocal proving how wrong the experts are. Volatility indicators that are traditionally known to gauge fear are at all time lows across global equity regions. This all proves that we are living the time of rational extremes. Mar 2009 and Oct 2008 when we mentioned about reversal and potential buying opportunities, the majority was rationalizing negativity. Now the market participants are rationalizing positivity.”

Markets in Romania retraced 60% of all the rise from March 2009. A month long negativity may not be enough for building back a positive case, but it is enough to take sentiment readings to the other extreme. Romanian sentiment review readings have dropped dramatically and the survey suggests we are heading towards extreme bearish sentiment. Now this is a monthly survey and hence it’s tough to pinpoint whether the bottom is end of Jun or early July. But what seems clear is that another 10-15% lower and it would be time to prove the bears wrong.

Coming back to how Romanian sentiment holds valid cues for the global sentiment, the answer is pretty simple. Sentiment, society and markets are held together by time. Global equities top and bottom together. It’s only between the top and bottom they exhibit divergent and relative performance. The end Jun, early July market bottom we are speaking about should be relevant for Global equities too. Let’s see.

Enjoy the latest Romanian Sentiment Review.

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A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH

ORPHEUS STORE

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Romanian Sentiment Review - The Lucky Analyst

This will not be the first time we will hear, or overhear that analysts at Orpheus just got lucky. We got you the Mar 2009 low when the markets were reeling under negative contagion and we got you the top with the current ongoing fall in May 2010 and now if you say that we got lucky because of Greece or Dow or Dollar, you are still living that causal explanation that lacks predictive value. Behavioral finance puts luck as a hot hand fallacy. We can never get you 100% accuracy, but what we have proved over a year of studying sentiment readings through RSR and almost five years of alternative research at Orpheus, that markets are more predictable than they seem. You have to be able to understand extremes.

This is what we said on 16 April in our RSR feature on Rational extreme

“Extremes are never rational and buying at extremes need preparation and knowledge. Extremes by very nature are overstretched and irrational. Now if we look at Romanian markets, its not just RSR readings but classic conventional momentum that suggest extremes. Internet bloggers have already started getting vocal proving how wrong the experts are. Volatility indicators that are traditionally known to gauge fear are at all time lows across global equity regions. This all proves that we are living the time of rational extremes. Mar 2009 and Oct 2008 when we mentioned about reversal and potential buying opportunities, the majority was rationalizing negativity. Now the market participants are rationalizing positivity. Our best wishes are with the majority. What we see is a non confirming extreme on Advance Decline, Yale Hirsch negative cycle seasonality and all time extreme bullish readings on RSR across indices and time frames. Of the experts are not the bullish. But who cares about experts anyway? What does an expert know? The Confidence index at all-time max (40). We continue to look at a topping market despite market’s inability to reverse in March.”

This is a clear case of anticipated and happened. Markets move in a cyclical rhythm and mathematical order. And all the collapse of Euro, Greece Riots, Romanian state punishing the pensioners is an order that was predictable after the overhang of excesses made from 2000 till 2007. Few of our readers would understand that credit up cycles look exciting and down cycles very painful. Till we built back the character and value we lost in good times, the down cycle will pain and surprise.

Emotional control now has to also learn to prepare for surprise. The best part of all this crisis, humility comes back, inefficiency separates from efficiency, new entry points emerge, learning increases and a small percentage of the market participants realize that waiting for the state to take care of your pensions is a bad idea and some analysts are not lucky, but objective. The market readings on RSR on 6 month basis continue to be high. BETFI 20,000 remains a distinct possibility. Trade safe and get ready for a life without Euro.

Enjoy the latest Romanian Sentiment Review.

Login for orpheus.asia member’s area here.

A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH

ORPHEUS STORE

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Romanian Sentiment Review - The Rational Extreme

George Soros has been recently quoted saying that “Buying at the start of a bubble is rational”. This is an open ended statement. It does not define a bubble, the degree of the bubble, the potential appreciation on Gold and of course the time George Soros might want to hold Gold. George Soros might have said many things along with this quote, but as information gets discounted over the internet, what is left is the bubble and rationality. Without the kind of preparation and knowledge George might have, a lay investor may draw his conclusions from what the guru implies. It’s all a Chinese whisper. You really need to research on Gold view to understand what he really means.

Assuming George message was summarized by the quote, what he is suggesting is that buying in extreme is rationality as the extreme is bound to get larger. If you don’t place it in context, the statement looks oxymoronic. It means a rational extreme. Extremes are never rational and buying at extremes need preparation and knowledge. Extremes by very nature are overstretched and irrational. Now if we look at Romanian markets, its not just RSR readings but classic conventional momentum that suggest extremes. Internet bloggers have already started getting vocal proving how wrong the experts are. Volatility indicators that are traditionally known to gauge fear are at all time lows across global equity regions. This all proves that we are living the time of rational extremes. Mar 2009 and Oct 2008 when we mentioned about reversal and potential buying opportunities, the majority was rationalizing negativity. Now the market participants are rationalizing positivity.

Our best wishes are with the majority. What we see is a non confirming extreme on Advance Decline, Yale Hirsch negative cycle seasonality and all time extreme bullish readings on RSR across indices and time frames. Of the experts are not the bullish. But who cares about experts anyway? What does an expert know? The Confidence index at all-time max (40). We continue to look at a topping market despite market’s inability to reverse in March.

Enjoy the latest Romanian Sentiment Review.

Login for orpheus.asia member’s area here.

A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Romanian Sentiment Review - The March Reversal

Last year when we talked about the March reversal, the comments from many on the internet called it a fantasy scenario. This is what we said, “When it comes to BETFI, March has a mathematical symmetry. End of March 2009 may provide a reversal.”

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What happened? Markets moved up from 8000 to 30,000, a rise of 275%. Now that we are once again in March 2010. The month is known for key reversals. We are expecting a turn down now, 50% lower from current levels. This means BETFI 15,000. The sentiment readings are mixed. Individual respondents are extremely bullish, while institutional users are neutral. Historically speaking retail extreme readings can’t  be ignored. Short term readings are also neutral. Individual readings are also key because the number of respondents are more than the institutional users.

The sentiment readings at 68 for BETFI (6 months) is still near historical highs and extremely bullish. A drop of 50% in value is the last thing market participants would be expecting now.  Advance – Decline indicator is also negative and does not suggest a positive tone to us. The indicator continues to diverge from the market prices.  Prices make higher high, while indicator makes lower high.  We continue to expect selling in March 2010. Primary, multi year bottoms are tricky. We have seen a wave of excitement till now, let’s witness some volatility now.


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A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Romanian Sentiment Review - Revisiting 30 billion euros

The Romanian capital markets were valued at 30 billion Euros in the best of times in July 2007. Then nobody wanted to believe crisis could come. When it came, the market found reasons and people to blame. The crisis came and washed value by 90% taking the valuation figure to 6 billion Euros. Again no one wanted to believe it can ever get over. What happened? Prices rose back to 20 billion today. Now how is the sentiment? “ Mukul when will they fall?” “Will they ever fall” “They will never fall” “Stupid surveys”.

The idea is that market will believe what the majority believes and the majority is always less rational. 20 billion Euros valuation now suggests that we have recovered nearly 60% of the losses from the top. This is no mean task. We are already 12 months in the rally. What happened from 8,000 to 30,000 BETFI caught many by surprise. Orpheus screamed Oct low, March low repeatedly, but lone voices are generally ridiculed and unheard. Perfection in forecasting does not exist. Now market breadth is falling for more than 6 months, making lower highs every time market goes up and sentiment readings for 6 month outlook are at all time highs.

This is what we said last time. “Selling in strength is as tough as buying at a bottom. They both involve high skill, individuality and ability to identify low risk entry and profitable exits. The top we are speaking about should occur anytime from early Feb to late Feb.”.

Now we are in early Feb. The only disconnect now is that short term monthly sentiment readings are still falling while long term 6 monthly readings continue to rule at all time highs. We will give it another few weeks. After that the surprise should restart. Faster you learn to disconnect from the mass sentiment, the better you can create wealth for yourself and your clients.

Enjoy the latest Romanian Sentiment Review.

Login for orpheus.asia member’s area here.

A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Romanian Sentiment Review - Long Bears, Short Bulls

If we had to make a trading system from the Romanian Sentiment Index, it would be like this. Extreme high readings would be time to go Long Bears and Short Bulls and extreme low readings would suggest the opposite. The current readings of RSR have reached historical extremes and this means that it is time to go long bears and short bulls. This may evoke a shock. Why should we sell now? We barely started moving up? And selling now, when we are testing new highs?
Extreme readings on RSR suggest that sentiment is optimistic and the majority does not anticipate a correction now. When the majority does not anticipate a correction is the only time we would prefer to be cautious. Moreover prices have been sideways but not really corrected since Mar 09. A 11 month rise without a serious correction on stocks like BRD, TLV, RRC and some other market majors does not look too encouraging. RSR November wrote about a short term bottom, prices moved up as anticipated. RSR December wrote about the topping process, now prices have retested September highs and a few of the blue chips have crossed respective levels.
Selling in strength is as tough as buying at a bottom. They both involve high skill, individuality and ability to identify low risk entry and profitable exits. The top we are speaking about should occur anytime from early Feb to late Feb. We will be surprised if market continues to push higher with such extreme readings. The anticipated multi month top should reverse prices and partially retrace the complete price up move from Mar 09 low. Whether we fall back to BETFI 20,000 or 15,000 we can’t say now. Another surprising aspect is that while RSR readings are rushing off the charts, even internationally we have seen readings hitting bullish extremes. This means that we are not alone in the world out there, global equities and sentiments are connected in time and generally most of them will fall and rise together. Now sentiment suggests the top is here. Let’s see.

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A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


Romanian Sentiment Review - Dubai vs. Bucharest

What works will always be debated because emotions don’t even leave us when we analyze forecasts. We have doing RSR (Romanian Sentiment Review) for more than a year and it continues to surprise us how a simple survey can be so powerful. Accountability is never 100% and the best global researchers have delivered 34% accuracy. Yes! Less than 50% accuracy. We invite you to visit our blogs and check the last 12 issues of RSR and do a month over month review. This survey sentiment product crossed 60% accuracy when it came to month over month outlook. End of this month we will be coming out with accuracy reports and will illustrate the case further.

Coming back to this weeks RSR. This is what we said last time

“On one side market structure remains weak, while on the other side we have sentiment readings that have crashed. This makes for a tough interpretation. Short term (few trading days, maybe be a few weeks) markets remain oversold and nearing a sentiment bottom, while on the intermediate term (a month or two) negativity can not be considered over.”

The short term bottom we talked about pushed prices higher in Nov. Now if the intermediate forecast is still valid we are still in a topping process on Romania than otherwise. An internal discussion threw some observations how the survey respondents might have responded with or without Dubai news. Well! This like many other observations are subjective thoughts. DUBAI has been underperforming BETFI since the start of the year. This has been illustrated below through a falling ratio line between DUBAI INDEX and BETFI prices. This means that the markets knew of the debt problem in Dubai and hence kept discounting the same over the last 9 months. This is why emerging markets like Romania were outperforming Dubai Index. The conclusion is DUBAI news can’t really change the sentiment survey much. Sentiment leads news not the other way around. Enjoy the latest sentiment readings on RSR.

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A SENTIMENT INDEX reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus CAPITALS and Prognosis.ro are two independent research companies publishing the ROMANIAN SENTIMENT REVIEW. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH


Romanian Sentiment Review: Back to May HIGHS

The anticipated negative case on BETFI happened. This is what we said in 13 Oct RSR

“Over the 6 months the RSR readings are still near or at positive extremes. We continue to look for lower prices in Oct. Whether it’s just a few weeks or negativity till end of year is tough to say now.”

The drop on BETFI was a sizeable 25%. Now that we are back to MAY highs and sentiment readings are no more extremely bullish, it is time to review.

Though BETFI cracked, the market movement remains polarized. BETC, BET, BETXT and BETNG dropped marginally. The A-D line (the sentiment indicator we illustrated last time) remains negative. A break here on the red trend line support will confirm a breakdown on the breadth indicator, suggesting further negativity than otherwise.

On one side market structure remains weak, while on the other side we have sentiment readings that have crashed. This makes for a tough interpretation. Short term (few trading days, maybe be a few weeks) markets remain oversold and nearing a sentiment bottom, while on the intermediate term (a month or two) negativity can not be considered over.

Immediate TIME CYCLES continue to point lower to a break at BETFI 20,000. Below that, how low we can go, is a tough call. Our preferred view suggests that the BULL MARKET is intact and any dips back to 15,000 is time to buy. End of November market situations should be clearer. Enjoy the latest RSR.

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A SENTIMENT INDEX reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus CAPITALS and Prognosis.ro are two independent research companies publishing the ROMANIAN SENTIMENT REVIEW. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

PROGNOSIS and ORPHEUS RESEARCH


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