Retail Sentiment/Conditioning

I had talked about this earlier in the week, how it would likely effect the shape of the reversal, how Wall St. "would not make it easy" with a clean, clear reversal as they need to keep the "buy the dip" crowd interested, so if they buy a dip of -1% and get a boost the next day, the next time there's a dip of 1.7% which is what we need to get to the start of the head fake move, they'll look at it as, "If a dip of 1% is good, then a dip of -1.7% is even better", this is essential to keeping a bull trap intact so when prices decline into and below the range, the bag holders start a snowball effect as their selling increases supply in a market with little demand which sends price down a lot faster.


In any case, the "BTD" crowd is still very much alive and active as we saw in the Investor's Intelligence Chart showing bearishness at all time lows since they've been tracking it, which means there's little built in demand at lower prices (shorts are an essential part of a healthy market as their covering provides sellers with demand when prices fall), without a healthy short presence, there's no guaranteed future demand (as shorts have to cover by buying at some point to take profits).

We also have sentiment updates from the stream,

Can't believe how bullish twits are everywhere:

"all technical levels protected ,,,,nothing ever breaks down . complete control"

That last part, "Complete Control" is a bit scary as it's this kind of attitude which leads to the market slapping you down and humbling you.

"Decent finish on $SPY ..hasn't taken out last week's low yet, I'm still bullish for now.

I expect $VIX to fail 12.7/13 max

someone trying to protect iwm at key level here"

This is what we anticipated, in a zero sum game, someone has to lose for someone to win.