Market Sentiment Indicators Are Neutral to Bullish
The CNN Fear/Greed Index bounced from 8 a week ago to 20 this week, remaining in bullish territory in terms of indicating short-term market direction. Ned Davis Research (NDR) short-term sentiment at 44 is in neutral territory.
Intermediate-term sentiment indicators have moved into more positive territory, but remain somewhat mixed in terms of market direction, The Investors Intelligence Bulls/Bears poll of market newsletter writers came in at 38% bulls and 21% bears, which is neutral to bullish. From a contrarian point of view bulls at under 40% is positive. However bearish sentiment needs to move much higher from the low 20s for a truly positive signal.
Meanwhile it is noteworthy that the NDR intermediate crowd sentiment indicator at 52 is at its lowest point in two years. While this indicator would be very bullish if it moved down to the low 40s, its downward direction does show investors are growing increasingly concerned about the markets. And that is a bullish signal from a contrarian point of view as we approach year end, which traditionally has been a favorable period for the markets.