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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.

Market Sentiment Indicators Are Neutral to Bullish
Market Sentiment Indicators Are Neutral to Bullish

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.

Market Sentiment Indicators Are Neutral to Bullish
Market Sentiment Indicators Are Neutral to Bullish

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.

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