If I recall correctly, it's a momentum indicator and it means
more upside ahead. This would fall in line with the extreme
bearishness we've had in the past couple weeks and even this past
week while the market kept rallying. When sentiment is extreme, be
careful siding with the crowd. If this plays out, dips are
buyable.
Posted by lessarda on 13th of Oct 2011 at 12:04 am
1) the AAII retail measure of bulls is off less than
2% from the entire year's average;
2) the AAII measure of bears has not yet hit 50% this year --
something it has exceeded at least once every year since 2005 (the
2009 high was over 70%!)
3) the minimum AAII bull-bear spread hasn't cracked -25% yet
this year -- again, this has seen bigger negatives every year since
2005;
4) the VIX put to call ratio 2 day totals are the 2nd highest
for all of 2011.
So, again, it looks like average bullishness (to above average
in some places); higher than average but not extreme bearishness;
and not too many in the middle.
The MKM technical analyst on Closing Bell today put the market
in the 'denial' phase in the "investor psychology cycle." That
seems as or more plausible than that we are launching to new
highs.
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If I recall correctly, it's
Posted by cw12 on 12th of Oct 2011 at 07:25 pm
If I recall correctly, it's a momentum indicator and it means more upside ahead. This would fall in line with the extreme bearishness we've had in the past couple weeks and even this past week while the market kept rallying. When sentiment is extreme, be careful siding with the crowd. If this plays out, dips are buyable.
Sentiment simply isn't extreme here:
Posted by lessarda on 13th of Oct 2011 at 12:04 am
1) the AAII retail measure of bulls is off less than 2% from the entire year's average;
2) the AAII measure of bears has not yet hit 50% this year -- something it has exceeded at least once every year since 2005 (the 2009 high was over 70%!)
3) the minimum AAII bull-bear spread hasn't cracked -25% yet this year -- again, this has seen bigger negatives every year since 2005;
4) the VIX put to call ratio 2 day totals are the 2nd highest for all of 2011.
So, again, it looks like average bullishness (to above average in some places); higher than average but not extreme bearishness; and not too many in the middle.
The MKM technical analyst on Closing Bell today put the market in the 'denial' phase in the "investor psychology cycle." That seems as or more plausible than that we are launching to new highs.