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Category: Sentiment Updates

Sentiment Indicators Say Stock Investors Should Be Cautious

Short-term indicators of investor sentiment came in mildly bearish last week, pretty much unchanged from the week before. The Ned Davis Research (NDR) short-term sentiment indicator was at 60, slightly below the previous week. The CNN Fear Greed gauge was slightly higher at 72.

Intermediate indicators remain in bearish territory. The NDR Crowd Sentiment is at 68, down 2 points from last week but still too high from a contrarian point of view.

The Investors Intelligence Bull/Bear Ratio of sentiment among investment newsletter writers came in at 57% bulls and 18% bears, like the previous week. Used as a contrarian indicator, since these writers usually are wrong, this is another indicator that investors should remain cautious.

September 14th 2018 - Sentiment is a 72
September 14th 2018 – Sentiment is a 72

Intermediate Term Sentiment is Not Outright Bearish

Last week short-term sentiment backed off a bit, and the fear/greed gauge moved down to 55 from the mid 60’s. The NDR short-term composite came in at 70, which is a sell.  I would rate the short term as being mildly negative.

Intermediate-term sentiment is not outright bearish. NDR crowd sentiment is at 70.
Bullish newsletter writers are at 60% and bearish writers are at 18%, creating one of the widest
spreads of the year between the two groups. Having the majority of market participants so aggressively leaning in one direction is a very negative development.

Sentiment Indicators Flash New Warning Signs for Stock Investors

Short-term and intermediate term measurement of investor sentiment about stock market direction jumped sharply higher into danger territory last week, flashing warning signs investors should be very careful. The Ned Davis research (NDR) short-term sentiment poll hit 67, while the NDR intermediate-term sentiment poll moved up to 69. Anything near 70 means investors should be very careful.  The CNN Fear & Greed Index closed the week at 73, also a clear warning sign.

Another warning for investors comes from the Investors Intelligence Bull/ Bear measurement of sentiment among investment newsletters. It turned outright bearish. Bullish sentiment among newsletter writers moved up to 60% vs. 18% who were bearish. Since these writers are historically wrong, the Bull/Bear poll also is telling investors to watch out.

Intermediate-Term Sentiment Indicators Flash Warning Signs for Stocks

Measurement of the level of  investor optimism for the short term moved slightly higher this week compared with the previous week. The CNN Fear & Greed Index moved to 61 while the Ned Davis Research (NDR) Short-Term Sentiment Poll was at 60. From a contrarian point of view that indicates stock market investors should be cautious but not overly alarmed for the near term.

On the other hand,  sentiment indicators on market direction over the intermediate term are flashing warning signs. The NDR crowd sentiment is at 67, which is quite high. The Investors Intelligence Bulls/Bears is at a very optimistic 57% bulls and 18% bears.  This puts the bulls/bears ratio at 40, which is in the danger zone.

Investors Intelligence Research -Reproduction and re-transmission of this report, and the data contained within, is strictly prohibited without prior permission.

Short-term sentiment was mixed this week

Short-term sentiment was mixed this week. NDR short-term sentiment dropped a bit to 50,

A neutral ready. However the CNN Fear & Greed Index moved from 62 to 71, a negative

suggestive of too much bullishness creeping into the market.

The intermediate-term indicators were inline with last weeks gauges, which were a bit too bullish.

NDR crowd sentiment came in at 67.5%, very close to the dangerous

70% plus area. Investor’s intelligence registered at 55% bulls and 18% bears, which remains unfavorable and indicates that

There are currently too many bullish newsletter writers. Sentiment continues to keep us cautious.

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