Why Present High Margin Debt is Worrisome for Stock Market

ByBrad Lamensdorf

Why Present High Margin Debt is Worrisome for Stock Market. Although margin debt has declined a bit, this chart from Sentiment Trader indicates that it is still close to all-time highs. That’s despite many warning signs that the stock market is overbought.  Why is this worrisome? Very high margin often precedes major market declines.  It…

Increasing Investor Optimism and Greed Continues to Indicate Investors Should Lighten Portfolios

ByBrad Lamensdorf

Increasing Investor Optimism and Greed Continues. Investor market sentiment turned even more optimistic and greedy last week. From a contrarian point of view because investors are historically wrong about where the market is headed, we once again suggest you lighten your portfolio. The Ned Davis short-term indicator was in mid-40 neutral territory a week ago….

Play it Again Sam: This Important Short-Term Indicator is Warning Investors the Market is Even More Overbought

ByBrad Lamensdorf

Short-Term Indicator is Warning Investors the Market is Even More Overbought.  We thought it was important to show how The Investor Intelligence Short-Term Composite Indicator (see chart) has moved even further into overbought territory .  As a result its showing close to 80% from slightly below 70% two weeks ago.  At that time, we wrote about…

Sentiment Indicators Continue to Indicate Investors Should Lighten Portfolios

ByBrad Lamensdorf

We are constantly astonished how consistently investors make wrong bets on the markets, investing near tops and selling near bottoms. That’s because they are driven by irrational emotions of fear and greed, instead of reality. And that’s why we use investor sentiment gauges as contrarian indicators of where the market is headed. Back in late…

Why Sentiment Indicators are a Powerful Contrarian Tool

ByBrad Lamensdorf

History has shown us that retail investors as well as so-called market professional are usually wrong about the direction of the stock market. So betting against them is a way to help you make money.  Strong evidence of that comes from the Investor Intelligence Bull/Bear poll of more than 100 stock market writers who historically…