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Category: Sentiment Updates

Short Term Gauges Have Retreated

Short term gauges have retreated  after two weeks of selling. The CNN fear greed index is at 37, down from the mid- 50’s last week. The NDR short term sentiment gauge is at the mid-50 range, down from a recent peak of 85.

While we are off the highs, the numbers haven’t entered into buy territory yet.

Intermediate indicators have come in a bit, but far less than one would have expected. Investor’s intelligence

Bulls/Bear’s came in at 47% bulls and 18% bears. This leaves the Bull/Bear spread at 29%, which is still wide and far from a buy signal.

NDR Crowd Sentiment also remained elevated at 66% bullish, far from a buy signal.

 

Sentiment gauges retreat a small amount under trade tension

Short term sentiment pulled back this week a touch. The CNN Fear greed index is neutral at 57.

“Last week the NDR short term sentiment hit 85, and this week it came in at 66. It remains in a sell
signal.

Long term sentiment remains too bullish. The Investors-Intelligence bulls/bears remains negative, at 52 bulls and 17% bears. NDR crowd sentiment is up a touch to 68. Each remains in a negative position.”

Market Sentiment Gauges Warn: “Be Fearful” 

“Be fearful when others are greedy and greedy when others are fearful.”
– Warren Buffett

Short-term and intermediate-term sentiment gauges are signaling investors have become greedy –  warning signs that that stock prices are too high. The CNN Fear and Greed Index is now in greedy territory at 63.  Meanwhile, the Ned Davis Research (NDR) short-term sentiment gauge is at 85, compared with 18 last February. That also means greed and excessive optimism pervade investor sentiment.

Intermediate-term sentiment this week also moved into the sell territory.  The NDR Crowd Sentiment Poll moved up to 69, signaling excessive investor optimism.  Another contrarian indicator, the Investors Intelligence Sentiment Poll of investment newsletter writers, also move back into the sell area with 56% of writers bullish and 18% bearish.

Market Sentiment Gauges Flashing Mixed Signals

Short-term measures of investor market sentiment are flashing warning signs. The Ned Davis Research (NDR) gauge has moved up to a sell signal at 78, a very high number for this short-term measure. Meanwhile, at  62, CNN’s Fear/Greed gauge has moved higher into the greed zone, also warning investors to be cautious. from a contrarian point of view.

Long-term sentiment gauges, on the other hand, have become more bullish. The Investor’s intelligence bulls/bears sentiment number has

jumped to 52% bullish, while the bears have dropped to 19%. Meanwhile, the NDR intermediate crowd sentiment number is basically unchanged at 64.  While this is high, it does not enter intermediate sell territory until it reaches 70.

 

“Be fearful when others are greedy and greedy when others are fearful.”

–Warren Buffett 

Sentiment Remains Elevated

“Be fearful when others are greedy and greedy when others are fearful.”

–Warren Buffett 

Overly Optimistic Investor Market Sentiment Continues to Flash Warning Signs

Short-term market sentiment indicators were showing slightly less investor optimism last week. But, as  contrarian indicators, they were nowhere close to buy territory.  The CNN Fear/Greed index fell back to 48 compared with 55 the previous week.  At the same time, the widely followed Ned Davis Research (NDR) short-term sentiment indicator was still warning of excessive investor optimism despite falling to 62, down from 72 the week before.

Meanwhile intermediate term sentiment indicators showed investors remained stubbornly optimistic.  Investor’s-intelligence Bulls/Bears came in at 50% bulls and 20% bears. The NDR crowd sentiment moved from 66% to 63%..

Beyond warning signs from investor sentiment indicators, I should mention that key banking stocks are starting to fall apart, which could portend a major market correction. We remain cautious

 

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