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Investors Intelligence Newsletter continues:
“Now they have fallen back to midway between those two levels, despite the index gains, they trade at least near their July highs and in some cases above. That is a favorable sign suggesting they were not rushing to accumulate new positions and there is likely still plenty of cash on the sidelines.
If the averages can approach their spring 2012 peaks those funds will be forced into the markets and that could provide an additional push even higher. Overall sentiment remains positive until the bulls reach 50%.
There was a slight gain in the bears, up to 27.7% from 26.6% a week ago and 24.5% before that. The new bears commented on the overhead technical resistance that halted prior rallies, and were generally unconvinced that politicians in either Europe or the US would make the needed tough decisions to begin a solution to the major fiscal problems. Many bears have also held their negative stance for some time. The bears don't show a contrarian positive signal until they move up to the 30% area, and higher.
There was barely a change for the advisors calling for a correction, at 32.9%, from 33.0% a week ago. Their number was 39.4% on 1-Jun and a bit higher just over a month before that, at 40.9% to begin May. The markets did correct from those highs as these editors projected and that current/recent lower reading shows at least some of them did move back into stocks. However a large number remain unconvinced that the market retreat has run its course, with mention of retests of the June lows still due.
The spread between the bulls and bears narrowed again, to +11.7% from +13.8%. It was near +20% each of the two weeks prior to that and it continues to move in the right direction for a new buying chance. The difference is the smallest since 1-Jun when it was +7.4%. That was a favorable contraction from +31.5% in late March.
That was just in the danger territory of +30% and above. In Apr-11 the difference reached a scary +40%. In contrast the spread was pointing to a rally with a negative reading of -11.9% at the start of Oct-11. This is a contrarian indicator. Wide negative spreads [below zero] show low risk for new positions. High readings [above zero] signal increasing risk.”
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I would just add to this that increasing pessimism into a market advance is generally a contrarian indicator. This may mean the markets will frustrate bearish participants by continuing to head higher.
© 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.
The interviews with James Turk, Michael Pento, Stephen Leeb, John Hathaway and legendary Art Cashin ($612 billion UBS) are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which include Gerald Celente, Don Coxe ($538 billion BMO) and Eric Sprott by CLICKING HERE.
Eric King
Here Is A Huge Key To The Markets
With tremendous volatility in global markets, investors and professionals are wondering where the markets are headed from here. This piece will provide a huge clue for investors. Today King World News wanted share with its readers key portions from the latest Investors Intelligence report.
This is an extremely important piece because it shows increasing pessimism for the third week in a row, even as the market continues to strengthen. Here is the latest Investors Intelligence report: “We did see the third weekly drop for the bulls to 39.4%, from 40.4% last time. The first week of July had their number at 44.7%, up from 34.0% at the start of June when the averages fell to their 2012 lows.”
© 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.
August 3, 2012
