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Investors Intelligence - Latest Sentiment Readings on Stocks
With intense volatility in stock markets, today King World News wanted share, with its global readers, key portions from the latest Investors Intelligence report: “This week the bulls jumped to 48.4%, from 45.3% a week ago. That reading again shows the most bulls since July. It signals an overall optimistic outlook is still holding, even as the bulls express frustration over Europe. The markets and the % of bulls are still up sharply from the start of Oct when the latter reading was just 34.4%.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
December 22, 2011
Investors Intelligence continues:
“Sentiment is most useful at market turning points and that figure was 11.9% below the bears suggesting the yearly index lows were bottoms. From there, the rising number of bulls is a good sign as it shows money moving into stocks. Sentiment doesn't become dangerous until the bulls exceed 50%, with most tops showing them near 55%. Most averages achieved their 2011 highs in April when the bulls reached 57.3%. Many advisors are still projecting an index breakout above the October tops -- that would correspond with a shift in advisor optimism.
The bears were unchanged at 30.5%, after dipping below 30% two weeks ago. Those readings are all down about 17% from the start of Oct when we counted the most bears since Mar-09. That high level suggested many advisors had raised cash. Contrarians recognized it as a buying opportunity. We are now watching for a further contraction to the mid-20%s for the bears if stocks can resume their moves up and indexes test their yearly highs.
The correction decreased to 21.1% after rising to 24.2% last issue. Early Oct saw the correction reading fall to 19.3%, a rare level showing the editors had taken a strong stance, either bullish or bearish. That coincided with a market low. At the next market high we should also see a correction level below 20%, with the majority then on the bullish side
The difference between the bulls and bears was +17.9% (see above chart), up 3.1% from a week ago and back to the recent high spread since Oct. We also have the 9th straight reading above ‘0', after spending 6 weeks in positive territory below there. The spread was -11.9% at the start of October.
This is a contrarian indicator so wide negative spreads [below zero] are signs of low risk for new positions. The notable upturn on the difference chart now confirms that. Now watch for bull and bears to move in opposite directions and increasingly higher levels [above zero] are bad. The spread was well above 20% in July and a near record +41.6% to start April.”
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© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
