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Investors Intelligence - Latest Sentiment Readings on Stocks
With continued volatility in stock markets, today King World News wanted share, with its global readers, key portions from the latest Investors Intelligence report: “Markets ended the holiday shortened week with just modest declines and each of the four sessions included well below average volume and stock breakout activity. Many traders apparently closed their books early for 2011, somewhat typical with the two consecutive holiday Mondays. Indexes and indicators remain bullish and the first session of 2012 included strong early gains to again test fall and Dec highs.”
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,
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January 4, 2012
Investors Intelligence continues:
“A small retreat occurred for the bulls, to 49.5%, from 50.5% a week ago. That showed the most bulls since early May, when their number was contracting from an April peak at a lofty 57.3%. Readings above 55% are dangerous and bull market tops often include them as high as 60%. Many of the recent bulls noted the historic record of year-end gains along the generally positive markets preceding Presidential elections.
After the April peak the bulls contracted to 34.4%, the week of the lows on 4-Oct. From there, the rising number of bulls is a good sign as it shows money moving into stocks. Any significantly higher bullish sentiment would now be a worry.
The bears rose 30.5%, up from 29.5% and their third week at that level out of the last four. All are down about 17% from the start of Oct when we counted the most bears [46.3%] 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 with indexes testing their yearly highs.
The difference between the bulls and bears was +19.0%, down 2% from a week ago and still not close to the spread near +30.0% in July and well above there last Spring. That was the 11th straight reading above ‘0', after spending 6 weeks in territory beneath. 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. Now watch for bull and bears to move in opposite directions and increasingly higher differences [above zero] are bad. There was a near record of +41.6% to start April.”
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© 2012 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
