Overly Bullish Sentiment Indicator is a Negative for the Market

Market sentiment is still too frothy. Not much has changed in the last week. The spread between the bulls and bears has come in a bit. It’s gone from 43 to 32. This is normal as a small correction has started to make some folks nervous.  However, this is likely just a start to the…

By Brad Lamensdorf Dumb money is pushing the market higher. One chart I keep on my radar is the confidence spread of smart money in the market to dumb money. At the lows in March, smart money was all bulled up. I was very bullish at that point too. That was the correct call to…

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…

We use investor sentiment as an important gauge on the direction of the stock market. Sentiment Numbers Mean Stock Market Investors Should Remain Cautious. The latest Investor Intelligence Bulls/Bears poll of newsletter writers show that the May and August corrections were not strong enough to create the type of negative sentiment signaling buying opportunities that traditionally…

We use investor sentiment as a contrarian indicator of where the market is headed since investors are usually wrong.  So just before the recent big downward moves, investors were extremely fearful. And what do you know? The market moved up.  Now after the more recent moves up, investor short-term and intermediate-term sentiment has become more…

Investor Sentiment Indicators Advise Greater Caution.  We use sentiment as contrarian indicators on stock market direction.  Bullish sentiment was up among the more than 100 newsletters polled by Investors Intelligence. It reached a lofty 58% compared to 56.7% the week before. That is the third straight week this indicator has been in the danger zone…