The current
readings do not reflect the weekend rescue deal for Fannie Mae and
Freddie Mac. Most advisors were noting the market weakness towards
the end of last week, which ended with the Dow at its lowest Friday
close since July-11. Both the bulls and bears moved up a bit from
the previous week’s reading, with more bears than bulls for the
second week in a row. Out of the last thirteen weeks, there has
been eleven weeks with more bears than bulls. The Sentiment
Indicator remains bullish, as overall the advisors continue to take
a negative market view.
The
bullsmoved up slightly to
38.2%,from 37.8% a week ago. Readings are below a
thirteen week high of 40.7% on Aug-15 and up from their yearly low
of 27.4% on Jul-3 (the fewest bulls since 1994). The Dow
Jones Industrials are only slightly changed from their early July
levels. It is normal for the advisors to show major shifts in their
outlook well before a major market move gets going.
The
bearsmoved up to
41.6%,from 40.0% a week ago, with their recent low
of 38.4% shown three weeks ago.
With both bulls
and bears higher, the change had to come from the
correctioncamp, which fell to
20.2%from 22.2% a week ago. This classification is
often a temporary respite for the advisors before they shift from
bearish to bullish and vice-versa.
The
differencebetween the bulls and bears was
-3.4%,expanding slightly from the previous week.
The spread was around -20% for three weeks in July and those were
very positive readings, as shown by the lows on the chart
below.
Recent
sentiment readings have showed extremes similar to those that
accompanied the 1994-95 period, when markets spent almost a year
moving sideways preparing for their next major upmove. The end of
February 1995 saw the first close over 4,000 for the Dow Jones
Industrials, and the second leg of the bull market took flight.
That month also marked the end of a nine-month run when the bears
outnumbered the bulls. The current environment had markets peaking
last October and we have spent most of 2008 forming new
bases.
Bullish Themes
“In summary,
the stock market is in the process of establishing an important
bottom in our view. This process is taking place over an extended
period of time as investors await indications that a sustainable
economic recovery will materialize. Historically the stock market
begins to discount future economic recovery approximately six
months in advance of the economic evidence. Investors are currently
preoccupied with the ongoing housing recession, tighter credit
conditions and high energy prices. As we move into next year, we
expect investor attention to focus on economic recovery and an
improving corporate earnings outlook.” (3-Sep-08)
Bob Brinker’s Marketimer, 10789
Bradford Rd, Suite 210, Littleton CO 80127
“The share
recent declines in oil and commodity prices should help reduce the
severity of the inflation problem going forward, and could (as
driving and heating costs fall) encourage consumers to boost their
spending at the retail counter.
Such inflation
and retail help aside, the odds would seem to favor a recession
evolving either later this year or in 2009. A second stimulus deal
- which could be adopted in coming months – would moderate the
effect of a business downturn.
This is clearly
not a setting for the faint of heart, but it may be a profitable
one for the patient and intrepid” (5-Sep-08)
The Value Line Investment Survey
| 220 East 42
ndSt, New York, NY 10017
Bearish Themes
“The stock
market is building up the necessary reserves for its next major
move, a third wave decline at multiple degrees of trend. This
should be the strongest decline of the bear market to date. It will
start once the current bounce is exhausted.
Credit spreads
between high-and-low-grade have already exceeded their level of
July 15, so downside pressure on stocks is intensifying. We
anticipate a continued deterioration in spreads as investors shun
lower-grade debt for the safest bonds available. Gold remains in a
declining phase that should eventually draw prices to the area
surrounding $600. Once the current bounce ends, silver should also
decline to a new low. The US$ index experienced its largest rally
in at least three years. After a pause, prices should continue
higher.” (September)
Steve Hochberg’s Elliot Wave
Financial Forecast, POB 1618, Gainesville, VA 30503f
“The short-term
trend is flat and the longer term has a Bearish bias. The earnings
of some companies continued to improve though June, but August
appears to be weaker. The international stock markets are weaker
than the US market. The strongest US stocks were major companies
with larger export businesses.
Participation
reached a new high in June 4, 2007 followed by a low on July 15,
2008. Net Investor Activity reached a record high on October 10,
2007 and a low on July 15, 2008.” (1-Sep-08)
The Lindquist/Lepic Market
Letter, 3011 South Josephine, Denver, CO 80210
Newsletter Extracts
The Four "C's" Dominate
Deliberations on World Markets |
Ian McAvity, Editor| POB 182, Adelaide St Station,
Toronto, ONT M5C 2J1 Canada
“Credit, Crude,
Confrontation & Confidence are four known major trend risk
factors that are not fully discounted in the markets in my opinion.
Credit: I've
harped over & over on the assorted cockroaches that would
emerge from bursting the generational credit bubble. The media keep
calling it a "sub-prime" crisis. but it's much broader ... A new
factoid crossed my desk this weekend that I read as a talking head
was assuring his audience that the worst of the sub-prime crisis is
fully priced into financial stocks. I was startled to learn the
number of Prime Mortgages over 60 Days delinquent has exceeded
sub-prime delinquencies four months in a row. There are many more
Primes' than Sub-Primes, but it's a tidbit indicative that the
problems are still spreading.
When I see
financial institutions trying to flog new equity, and selling off
profitable subsidiaries, (the equivalent of their crown jewels), it
tells me this mess is a long way from over.
Crude Oil is a
lot more than Gulf weather forecasts and US inventory levels, but
that's all you hear about in media explanations of market
gyrations. Thankfully Hurricane Gustav came in below worst-case
estimates this week, and traders dutifully sold crude off heavily.
Supply risks from Nigeria, Iran, Venezuela and falling Mexican
output are major trend risk factors the weather related traders
tend to ignore.
Confrontation:
Russian actions in Georgia may be one of the most important
geo-political statements since the Berlin Wall came down & the
USSR broke up. Russia is the primary European energy supplier and
Putin knows it. NATO proposing to put a missile base in Poland
brought to mind the Cuban missile crisis in Cuba of 1962 ... poking
a finger in Putin's eye. Like the US occupation of Iraq, it has
little to do with territorial security or independence ambitions,
it's all about energy. In Georgia, it's pipelines. US & Israeli
saber rattling about 'taking out' Iran's nuclear program facilities
was also a likely addressee for Putin's message. An unpopular,
pugnacious lame-duck administration provoking confrontations with
Russia on their way out sounds like a bad Monty Python script that
even Hollywood would turn down. US$ strength is being boosted by
Euro weakness on economic and new geo-political risks in my
view.
Confidence:
I've previously noted Paulson & Bernanke seem to be major
J&J salesmen, seeking the next bigger Band- Aid as they try to
put the con back into confidence. Increased regulation &
oversight is not going to restart an unsustainable credit
expansion. Congress is the other scary 'C', coming back into
session for one last pre-election fling that will undoubtedly pass
multiple layers of pork and pandering. Actions aimed at curbing
"evil speculators" in commodity markets, tinkering again with short
sale rules and assorted "blame game" targeting might backfire on
them. It's okay for beleaguered execs to mislead investors with
bullish statements, but they want to go after those voicing 'evil'
negative, opinions? It boggles the mind to hear how they think that
free markets should operate!
Crash or
Correction? My comment a few months ago that $110 Oil could only be
bullish if it fell there from $135 was more prescient that I
expected. With oil down from $145, and political pundits aiming for
sub-$l00 by Election Day, every drop is pronounced "a crash" in the
media. A correction in an ongoing secular uptrend is the more
accurate label. The GSCI Commodity Index above made a seven-fold
rise from its 1999 low. The current dip is the fourth to exceed 20%
since the trend started. If the global economy tanks in 2009, it's
possible it could pull back as far as 500 without altering the
secular uptrend case. This index is heavily energy weighted, and
500 might roughly coincide with $70 oil ... that's not a bet I
would make. I'd still be more nervous about seeing a
geo-politically fueled spike towards $170.” (3-Sep-08)
A Bottom is in Place
The Sudbury Bull and Bear Report
|
Jim Miekka, Editor| 6735 14
thSt South, St Petersburg, FL 33705
“As we look
back to the Death Valley buy signal on July 15, we should remember
that historically the low has been retested as many as 3 times in
the year following the signal. We had a first retest on July 28,
when the market came within two percent of the Death Valley lows.
We have now returned to a similar level. Surveying the damage of
last week, we must ask whether a second retest of the July 15 lows
is fully in place, or has a bit more to go. The picture is murky.
The NYSE index has fallen to 2% below its July 15 value, but the
DJIA, S&P 500, and NASDAQ indexes are still 2.4%, 1.8%, and
1.8%, respectively, above their July 15 values. Thus, we have
either had the second retest, or are very close to it. Following a
second retest, the market has always rebounded in the past.
.
September is
usually the weakest month of the year for the stock market, but the
fourth year of the presidential cycle is an exception, with an
overall flat market in which the S&P 500 is down slightly, but
the NASDAQ is up slightly.
Market
sentiment, as measured by the bulls and bears of Investor's
Intelligence, turned a little more negative last week, with bears
gaining relative to bulls. Having more bears than bulls among
newsletter writers tends to precede market rises, but the response
is seldom immediate.
If the market
is going to rise quickly from here, we would expect to see a strong
surge in the advance-decline line, and a rapid decrease in new lows
on both the NYSE and the NASDAQ. Failure to achieve these moves
will likely result in a range-bound, lackluster market lasting
perhaps until Election Day. After that, a year-end rally is likely
because uncertainty about the future makeup of our government will
be removed.
Since we
believe that the market has completed, or nearly completed, its
second retest of the July 15 market lows, our current
recommendation is to maintain your position in mutual funds, and to
hold two long S&P 500 mini contracts until further notice.”
(7-Sep-08)
Advisors Sentiment Table
Date
DJIA
S&P 500
Bullish
Advisors %
Bearish
Advisors %
Correction
Advisors %
Tue Sep 9, 2008
11,510.74
1,267.79
38.20
41.60
20.20
Tue Sep 2, 2008
11,516.92
1,277.58
37.80
40.00
22.20
Tue Aug 26, 2008
11,412.87
1,271.51
39.30
39.30
21.40
Tue Aug 19, 2008
11,348.55
1,266.69
40.70
38.40
20.90
Tue Aug 12, 2008
11,642.47
1,289.59
31.80
45.50
22.70
Tue Aug 5, 2008
11,615.77
1,284.88
34.00
43.60
22.40
Tue Jul 29, 2008
11,397.56
1,263.20
30.00
50.00
20.00
Tue Jul 22, 2008
11,602.50
1,277.00
29.20
49.40
21.40
Tue Jul 15, 2008
10,962.54
1,214.91
27.80
48.90
23.30
Tue Jul 8, 2008
11,384.21
1,273.70
27.40
47.30
25.30
Tue Jul 1, 2008
11,382.26
1,284.91
31.90
44.70
23.40
Tue Jun 24, 2008
11,807.43
1,314.29
33.70
39.30
27.00
Tue Jun 17, 2008
12,160.30
1,350.93
36.30
37.40
26.30
Tue Jun 10, 2008
12,289.76
1,358.44
43.00
32.60
24.40
Tue Jun 3, 2008
12,402.85
1,377.65
44.80
31.10
24.10
Tue May 27, 2008
12,548.35
1,385.35
37.90
32.20
29.90
Tue May 20, 2008
12,828.68
1,413.40
47.30
30.80
21.90
Tue May 13, 2008
12,832.18
1,403.04
46.00
29.90
24.10
Tue May 6, 2008
13,020.83
1,418.26
44.40
32.30
23.30
Tue Apr 29, 2008
12,831.94
1,390.94
40.90
31.80
27.30
Tue Apr 22, 2008
12,720.23
1,375.94
39.10
35.60
25.30
Tue Apr 15, 2008
12,362.47
1,334.43
37.80
38.90
23.30
Tue Apr 8, 2008
12,576.44
1,365.54
37.40
38.50
24.10
Tue Apr 1, 2008
12,654.36
1,370.18
36.40
37.50
26.10
Tue Mar 25, 2008
12,532.60
1,352.99
36.70
41.10
22.20
Tue Mar 18, 2008
12,392.66
1,330.74
30.90
44.70
24.40
Tue Mar 11, 2008
12,156.81
1,320.65
31.10
43.30
25.60
Tue Mar 4, 2008
12,213.80
1,326.75
41.90
36.60
21.50
Tue Feb 26, 2008
12,684.92
1,381.29
42.00
36.40
21.60
Tue Feb 19, 2008
12,337.22
1,348.78
41.60
33.70
24.70
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It's all covered in the
Clearer S&P 15 min chart
Posted by matt on 10th of Sep 2008 at 11:37 pm
It's all covered in the nightly update, make sure to listen to it, and it's been posted
can you post sentimental data?
Posted by kichan77 on 10th of Sep 2008 at 11:48 pm
can you post sentimental data?
Title: Investors Intelligence Data The current readings
Posted by matt on 10th of Sep 2008 at 11:57 pm
The Four "C's" Dominate
Market sentiment, as measured by the bulls and bears of Investor's Intelligence, turned a little more negative last week, with bears gaining relative to bulls. Having more bears than bulls among newsletter writers tends to precede market rises, but the response is seldom immediate.
If the market is going to rise quickly from here, we would expect to see a strong surge in the advance-decline line, and a rapid decrease in new lows on both the NYSE and the NASDAQ. Failure to achieve these moves will likely result in a range-bound, lackluster market lasting perhaps until Election Day. After that, a year-end rally is likely because uncertainty about the future makeup of our government will be removed.
Since we believe that the market has completed, or nearly completed, its second retest of the July 15 market lows, our current recommendation is to maintain your position in mutual funds, and to hold two long S&P 500 mini contracts until further notice.” (7-Sep-08)
Advisors %
Advisors %
Advisors %
Also available online at www.investorsintelligence.com . U nauthorized forwarding, copying or reproduction of this report will be treated as a breach of copyright. To subscribe, visit the website or contact Investors Intelligence on +1 914 632 0422.