Author: Brad Lamensdorf
Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.
The CNN greed fear index is at 55, up from the low teens a few
weeks ago. The NDR short term gauge is currently at 66, up from its lows in the teens in February.
This is a negative from a contrarian point-of-view, as
optimism has begun to rise.
Intermediate term sentiment from the Investor’s Intelligence is at 46% bulls
and 19% bears. NDR crowd sentiment is at 66. Both are midrange, however neither
have reached the oversold levels typical after such high numbers from January.
Short term sentiment gauges, such as the CNN fear greed indicator and the NDR short term sentiment indicator are mid-range, at 44 and 54 respectively. This does not reveal a direction either way, and little has changed from last week. Intermediate indicators have yet to reach oversold territory. In January many sentiment indicators were as high as they had been in decades. Currently Ned Davis crowd sentiment is at 59, while the newsletter writers’ bulls/bears have improved to 19 bearish and 49 bullish. These indicators are not signaling that it’s a time to buy right now.
Short term sentiment gauges have begun to bounce from their recent oversold positions. NDR short term sentiment is at 44,
up from the low 20’s. However intermediate term indicators, such as Investors Intelligence which currently stands at
48 bulls and 15 bears, failed to reach an oversold range. Had the indicators reached an oversold range, it would have suggested that a long-term bottom was in place.
The CNN fear -greed gauge is a bit more short-term. This indicator remains in the bullish range, as short-term fear remains
on the high side. Continued bouncing is needed in the short term in order for these gauges to return to a position of optimism.
Visit CNN Money – Fear & Greed Index Tool Here.
By Brad Lamensdorf