Investor sentiment is a key contrarian barometer when is comes to analyzing and timing markets. Benjamin Graham, A British born, American Economist, and the father of value and neoclassical investing famously said.

“There is a considerable tendency for common stock investors to do the greater part of their buying, both of “good” and “bad” securities, at high levels of the market. They are equally inclined to do the greater part of their selling at low levels of the market, a procedure which is not conducive to successful results.”

Investor sentiment is such a powerful tool of successful traders that over the years economists have developed a host of indicators to track this like the Bull/Bear Spread and The Put/Call Ratio to name a few. The most recent survey from American Association of Individual Investors (AAII) showed the percentage of investors with a negative outlook on the market surged to 59.4%. The last time this survey printed such a high percentage was weeks from the March 2009 low.

As a contrarian indicator, this should not be a big news flash to those who follow me. The other day I posted about risk assets about to be clobbered. (Read that article below)

Yesterday, RISK ASSETS GOT CLOBBERED. The SP500 shed 3.55% in one day.

So what does all this mean for Solana?

Currently my primary count is playing out as expected. I expect in the coming week, we will have a day where Solana is down. Maybe even down big, but closes green. I’m looking for the day where price reverses BIGTIME. We’re getting close to the bottoming zone (ANYWHERE IN THE PURPLE BOX). From there our first clue is price trades above $103.60 then $110.95. I believe our wave 1 or A will extend to the $111-$115 area before we get a meaningful retrace. However, right now we should focus on the imminent bottom and pay close attention from there. The thick purple arrows are my PRIMARY pathway. Whether this is an A wave or a wave 1…this rally will be explosive. BUT IT WILL NOT COMPARE TO THE RALLY ONCE THAT SHORT TERM TOP IS ECLIPSED. THE RETRACES WILL BE OF NO LARGE SIGNIFIGANCE. THAT IS WHY I DO NOT RECOMMEND TRADING IN AND OUT SOLANA ON OUR WAY TO $170.

At these current levels I highly recommend scaling into buys here.

Important: The Danger Zone is still a Major Obstacle…To properly deal with the danger zone…buys executed now should have stops in place once we have a confirmed bottom…at the bottom. Risk/Reward with a stop in place is 5:15 ( 5 points downside to 15 points of upside. 1:3 RR Ratio is optimum)

If you’re holding a position, or thinking about putting one on and you want to discuss it with me…please leave your comments below. I’ll answer them all as I see them.

Best to All,

Chris