The Roubini Sentiment Indicator turned bullish three weeks ago, giving a “buy” signal on Oct 10th. On Oct 11th, the SPY closed at 116.65. The Roubini Sentiment Indicator has historically been 62% reliable when giving buy signals, with gains averaging 1.5% over the following three week period. The SPY closed at $118.49 on Friday and returned 1.58% over the previous three weeks. So, the Roubini Sentiment Indicator was right again.
We’re not saying Roubini turned bullish on the stock market. He’s as bearish as he was 6 or 12 months ago. There’s a huge decline in the number of people are searching for Roubini’s predictions on Google. And this is bullish for the stock market. What isn’t good for Roubini is good for America, and what’s good for Roubini isn’t so for America!
There’s more. Two weeks ago, on Oct 17th the Roubini Sentiment Indicator again signaled a buy signal. On Oct. 18th the SPY closed at $118.28. If history is any guidance, then the SPY should close this week above $118.28 with a 62% chance.