Investor Fear Chart

[Bullitt]

Pretty much all sentiment indicators remain bearish (contrarian bullish), but if we're due for a bear market, then all those sentiment indicators are out the window. Unless sentiment absolutely craters in capitulation, it really doesn't mean much. AAII has been throwing big buy signals since January and none have stuck.

In 2008 there were "buy" signals the whole way down and plenty of bounces, but every bounce was met with increased selling. Today marks the seventh time since late January that the S&P 500 was up by 2% or more and failed to follow through with anything significant. That isn't bull market behavior.

 

[Bullitt]

CNN fear gauge at a "9" right now. It hit "8" last week at the lows. We're getting somewhere, but taken with everything else, it's anyone's guess when a bottom will arrive.

 

[Bullitt]

AAII 21% bull, 56.9% bear.

AAII scores it as slightly bullish, and I'd bet we'd have a more bullish reading if this poll was taken at 0831 this morning.

 

[Bullitt]

Yesterday was a 93% NYSE downside day where 93% of all volume was down. Most often those lead to additional 90% downside days which eventually lead to a capitulation type selling. There can't be any capitulation until we break the recent lows from a few weeks ago. Once that happens, we're going to want to see a 90% upside day. This is all very similar to the IBD method where a follow through day is used after multiple days of stable behavior to include five up days.

This isn't March 2020 where it turned in one day. Bottoms (and tops) are a process though in hindsight it will all appear so obvious. Right now signs point to additional selling ahead (break of lows) due to heavy selling volume and weak up volume, momentum continuing to weaken, and rallies fizzling out.

 

[tsptalk]

Grasping at some bullish straws -- a possible positive divergence:

New highs - new lows on NYSE.

 

[Bullitt]

Interesting chart. I wouldn't have thought we'd have such a divergence here.

With a VIX of 27 this is just a slow motion grind lower. We've yet to see a selling panic (4 or 5% down days). It's almost like speculators think the fed put is still in play and that there's nothing to worry about.

 

[tsptalk]

Getting worse but the new lows this morning in the indices is still not producing more new lows in individual stocks on the NYSE as we saw in May -- yet, anyway.

Grasping at some bullish straws -- a possible positive divergence:

New highs - new lows on NYSE.

 

[Bullitt]

WSJ is calling for the beginning of a new bull market after a 20% rise off the lows for the S&P 500. Price can do wonderful things for sentiment.

Most sentiment indicators are elevated bullish which is normally a hold or sell, but with a possible start to a new bull, those indicators don't matter so much as sentiment is often higher at the beginning of a bull.

 

[Bullitt]

AAII

35 Bear
32 Bull

First time in 12 weeks there were more bears than bulls. Pendulum starting to swing to excessive pessimism from excessive optimism.

 

[Bullitt]

Bull-bear spread is at lowest level since March. All the net gains in the S&P 500 since 2015 have come when this has been above 20%.

It takes bulls to have a bull market and right now they are heading for the exits.



https://twitter.com/WillieDelwiche/status/1706997582486995142?

 

[Bullitt]

AAII week ending 9/27

Bulls: 27.8%
Bears: 40.9%

Most bears since May 10.
Fewest bulls since May 24.

 

[Bullitt]

AAII week ending 10/4.

Bulls: 30.1%
Bears: 41.6%

Bears streak continues and is now at a 5 month low.

 

[Bullitt]

AAII week ending 10/11.

Bulls: 40%
Bears: 36.5%

Nothing but noise here. AAII indicates that the October 2022 low is solid. Nothing has come close to those bearish numbers which were the highest in many years.

 

[Bullitt]

The rally off both October lows (the 2023 October low, and the original 2022 October low) has triggered a return of Euphoria reminiscent of what happened at the start of some of the most significant cyclical bull markets in recent decades.



Weekly S&P500 ChartStorm - 26 November 2023