What is Investor Psychology Suggesting About the Stock Market's Future?

After Friday's market close, our Psychology Composite moved back to P1, which has very bullish connotations from both a short-term and long-term perspective.  We have been projecting a third leg down as we mentioned last week, which should complete this correction phase that we've been experiencing.

By looking at a few of our short-term indicators, you can see that they have corrected back to similar levels that were met at the bottom of that 3rd and final down movement during last summer's correction.

Click on the image above to view a larger chart.

Click on the image above to view a larger chart.

Click on the image above to view a larger chart.

As for our long-term indicators - the Hays Asset Allocation Model - we have extremely favorable odds today as each of our Psychology, Monetary and Valuation Composites are in their most bullish positions and are being supported by our Market Trend Analyzer, which remains in its Investment Phase similar to last summer's correction.

So as many of the world's markets are declining, we believe that US stocks are looking like a very attractive place for investors around the globe.

Don Hays

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