Investor Fear Chart

[Bullitt]

Generally commercial traders in the market indexes would be 'smart money'. Companies like Black Rock, Goldman Sachs, Credit Suisse, UBS, etc. that are offsetting massive bets or buying futures to maintain their index funds.

But yeah, I hear ya. These guys seem to be as mistake and FOMO bound as everyone else.

 

[tsptalk]

Wow, so even large speculators are the dumb money. Who the heck is the smart money? :scratchchin:

 

[Bullitt]

From sentimentrader. Large speculators (hedge funds, trend following alogorithms) are $47B short.

Looks like a good bit of fuel to spark another massive rally like the one off the March low.

 

[Bullitt]

AAII: 46 Bears to 24.9 Bulls. Less bulls and more bears than all of August, but still not at that 50 Bear Buy level. I'm thinking next week another push lower to 3100 should do it. CNN gauge saw an improvement as it dropped to the upper 40's.

 

[Bullitt]

Not where the market needs to be right now. I note that it got down to around 45 for June's bottom.

 

[Bullitt]

AAII looking promising - bears toeing that 50 buy line. Most bearish since 5 weeks ago.

Bulls: 23.7
Bears: 48.5

 

[tsptalk]

One channel was broken (red) but perhaps another (blue) held...

 

[Bullitt]

Some of that sentiment was worked off, but still kind of up there. Sell when the market is going down, buy when it's going up....

 

[bmneveu]

Time for a little cooler?

 

[Bullitt]

Burning hot.

 

[Bullitt]

Doesn't necessarily mean a crash is on the horizon, but sentiment is not in the bargain buyers favor.

 

[Bullitt]

RE: NAAIM

A note from Argus Research

This is only the eighth time the NAAIM has reached 100% (we count clusters as one occurrence). About half the time we exceeded 100%, the market saw decent pullbacks in the coming weeks/months; and half the time, the market kept grinding higher as in early and late 2013 and in late 2016.

 

[Bullitt]

RE: AAII reading of 20% bulls. Sentimentraders's comments below.

We've touched on the AAII survey several times in recent months, noting how these investors were not buying into the rally. Far from it. In the past, we've looked at the implied demographics of the survey, and it seems pretty clear that they skew heavily to the older end of the population.

Maybe that's why a massive tech-led rally hasn't excited them as much as rallies in the past. Whatever the reason, such a low level of optimism has rarely been to their benefit.

Backtests show that the S&P 500 has rallied 93% of the time over the next three months when fewer than 20.5% of respondents considered themselves bullish on the market.

We've never seen a rally this large, over this long of a period, and still had so few investors consider themselves bullish.

 

[tsptalk]

Yes, the difference between AAII and II is a little confusing. Our TSP Talk survey has been somewhere in between the two.

https://www.tsptalk.com/sentiment.php

 

[Bullitt]

Investors Intelligence came in at 57% bulls, 17% bears.

A bit lopsided, but as they state on their site investorsintelligence.com:

We don’t necessarily take a contrarian view to the newsletter writers in our survey. A large part of the time our sentiment readings remain neutral. We consider the norm to be 45% bulls, 35% bears and 20% neutral. However, we do pay attention to extreme readings in both bulls and bears and also to historically significant runs of more bulls than bears. To summarize, advisors are only wrong when you get too many of them start thinking the same thing.

In contrast, this week's AAII came in at 26% bulls, 47% bears. Another week very close to that 50% bear level that gives a contrarian buy signal.

 

[tsptalk]

2003 - mid-2008

 

[Bullitt]

From Argus Research:

The AAII survey shows only 31% bulls and 45% bears. This reminds us of the cyclical bull market from 2003 until 2007. During that bull, AAII got more and more bearish as stocks rose. Individuals started to sense the housing crisis, so the sentiment deterioration was more about the economy and less about the market. Now, individuals see horrible economic stats and large layoffs, which leads to a very bearish survey.

 

[Bullitt]

And bulls just keep disappearing according to AAII. From 34% to start June to 22% to start July.

[TD="class: xl63"]Reported Date[/TD]
[TD="class: xl64, width: 64"]Bullish[/TD]
[TD="class: xl64, width: 64"]Neutral[/TD]
[TD="class: xl64, width: 64"]Bearish[/TD]

[TD="class: xl65, width: 64"]July 2:[/TD]
[TD="class: xl66, width: 64"]22.15%[/TD]
[TD="class: xl66, width: 64"]31.96%[/TD]
[TD="class: xl66, width: 64"]45.89%[/TD]

[TD="class: xl67, width: 64"]June 25:[/TD]
[TD="class: xl68, width: 64"]24.14%[/TD]
[TD="class: xl68, width: 64"]26.96%[/TD]
[TD="class: xl68, width: 64"]48.90%[/TD]

[TD="class: xl65, width: 64"]June 18:[/TD]
[TD="class: xl66, width: 64"]24.37%[/TD]
[TD="class: xl66, width: 64"]27.85%[/TD]
[TD="class: xl66, width: 64"]47.78%[/TD]

[TD="class: xl67, width: 64"]June 11:[/TD]
[TD="class: xl68, width: 64"]34.28%[/TD]
[TD="class: xl68, width: 64"]27.67%[/TD]
[TD="class: xl68, width: 64"]38.05%[/TD]

[TD="class: xl65, width: 64"]June 4:[/TD]
[TD="class: xl66, width: 64"]34.55%[/TD]
[TD="class: xl66, width: 64"]26.58%[/TD]
[TD="class: xl66, width: 64"]38.87%
[/TD]

[TD="class: xl67, width: 64"]May 28:[/TD]
[TD="class: xl68, width: 64"]33.07%
[/TD]
[TD="class: xl68, width: 64"]24.80%[/TD]
[TD="class: xl68, width: 64"]42.13%[/TD]

 

[Bullitt]

The BofA bull & bear indicator at 2.3 vs. 1.9 last week. This indicator is an indicative metric only, used as contrarian indicators to identify market extremes (for informational purpose only, not investment advice).

https://www.isabelnet.com/bofaml-bull-bear-indicator-2/

 

[Bullitt]

AAII Bears 49% to Bulls 24%.

CNN gauge back to neutral bearish, barely.



Sentiment appears to be cooling by both metrics, which is a good thing.