Bull/Bear Ratio

It means we are going much much much (are you getting this?) higher. Everytime sentiment was this bad the market exploded.

The basic information is this

The top graph shows the performance of the overall market, looks like S&P 500 to me.

The bottom shows how many people think the market is going to go up relative to those who think the market will go down.

When the blue line on the bottom graph is how many people think the market will go up. When the blue line is high lots of people are bulls. When the blue line is low lots of people are bears.

Now I can’t quite see if sentiment is leading or lagging market movements on that graph. I think you would really need the raw data for that

I’m a subscriber to AAII, and using their published data since 1987, the correlation of sentiment and returns is a whopping 0 at the 95% confidence level.

I’m seeing a lot of anecdotal evidence that Joe and Jane Sixpack are scared of this market, which leads me to be short term bullish, but AAII, Investors Intelligence or Market Vane are effectively useless in using sentiment to call tops or bottoms in the market.

Estragon wins. :o)

Here is the link to what I believe a better and more clear chart.

http://bespokeinvest.typepad.com/bespoke/2007/05/should_we_worry.html

Joe Sixpack has no money, is mortgaged to the max and being called by advisors to leverage his kids’ education fund or RRSPs.

In the last few months, I’ve been getting all kind of calls from family and friends with no money and a big mortgage asking if they should borrow to invest!

The 20 year party is nearly over. Even if short rates are cut, long rates are still at all time lows. The reason why cycles have been more manageable in the last 25 years is because there was always room to cut rates to stimulate the economy. Those days are just about over.

not everyone that reads this blog is from kentucky living in a trailer park

Awww, crap; I didn’t proof read closely enough. Include a closing quote mark in the first part, like so:

[a href=”www.url.com/page/etc.htm”]link text[/a]

>>
I’m seeing a lot of anecdotal evidence that Joe and Jane Sixpack are scared of this market, which leads me to be short term bullish …
<< Byno, I'm not sure that's a proper conclusion unless you are blindly willing to follow a mostly meaningless indicator like those crackers at bespoke obviously are. I joined AAII for about 6 mo.s last year until I realized they had nothing to teach me. I availed myself of the refund, happily. I'd love to see more data, but your average AAII poll taker is not selling stocks short. They're sitting on their wallet when they're bearish. J6P has no money to put into the market, although all the CNBC Cheerleaders and Big Brokers are really turning up the propaganda. I'm seeing anecdotal evidence all over message boards and blogs that bulls are naive and extremely hubristic. The humble market participant is the long term market participant. All over the place you see bulls with the attitude that they should be handfed grapes from the stock market horn o plenty. The rookies are all in, and the pros are going to have to take their money or nothing at all. Lately they've been taking the rookie short seller's money, but that jig runs out of steam eventually. J6P has no money to put in the market. Maybe he'll borrow some and give her a whirl, but I doubt that can last for long. My guess is it's already happened. Where was that data on margin borrowing?

i find it interesting that nobody says squat how the market never fell when sentiment indicators were wildly bullish in nov and dec. its only when its ood for the bulls anythings mentioned. no mention about 330 bil in margin debt. d day is near

SPY and other broad indices will not roll over without a blowoff…probably a series of 100 point up dow days to catch the attention of everyone simultaneously.

The trigger for such a series could well be a symmetrical bias statement in no uncertain terms out of the meeting next week.

First 100+ on the leak…next 100+ on the release…next 100+ for momentum’s sake.

Unless and until we get such a move this stairstep up can go on and on…but when the big up series hits ‘ya better be ready ta get out of Dodge.’

Fast.

esb: “SPY and other broad indices will not roll over without a blowoff …”

Why not? Are you just parroting something you’ve heard, or is there a basis for this claim? I’m not saying it’s impossible, I’m just saying that it is not a necessary precursor.

Market Maker Alert!!!

Here is some news from Chris Gaffney at The Daily Reckoning that should make even Cramer sit up and take notice.

“I’ve explained to everyone that as far as I am aware, there are currently three subcommittees from the U.S. House of Representatives that will hold joint hearings on Wednesday, May 9th, to focus on China. The discussions will center on to what extent not only China’s renminbi (CNY) is undervalued as a result of the Government, but also Japan’s yen.

“They will most likely come to the conclusion that these are ‘highly manipulated’ currencies by each respective Government. Now here’s where it gets really meaty… The subcommittees, if finding the currencies are manipulated, will then discuss two things… 1. What further tariffs should be placed on their goods coming to the United States? And 2. Why the U.S. government, namely the Treasury Department, has not done more to rectify this situation?

Uh-Oh… That sounds to me like they are greasing the tracks for the protectionism measures that are already in the pipeline!”

Even Ferdinand the Bull would blink if Japan and China are threatened with protectionist measures.

Hey Winston,

Saw that. My bet is on MGPI for protectionist reasons. Wheat gluten tariffs and/or quotas. Just a reasoned conclusion. Co. is lobbying hard, based on external evidence. Make money where you can in these c-sucking markets.