Stock Market Sentiment Indicator Moves Into Cautious Territory

Stock Market Sentiment Indicator Moves Into Cautious Territory.  We use a number of sentiment indicators as contrarian guides on where the market is headed since investors inevitably are wrong.  One of our favorites is the Investors Intelligence bulls/bears poll of more than 100 newsletter writers. The latest survey shows that the difference between the bulls and bears expanded further, reaching +29.8%, from +26.7% a week ago. That is the widest positive spread since late Feb and is entering a level that tells investors to be cautious (See chart below). The bulls advanced to 53.5%, from 50.5% a week ago. That is approaching the 55% area that is suggestive of a potential trading top, last shown in  mid-February.. The bears barely changed at 23.7%, just below the prior 23.8% count. That is the lowest number since the first week of March, after readings below 20% throughout the prior year. In summary, this indicator is saying that the stock market may be moving into overbought levels.

Stock Market Sentiment Indicator Moves Into Cautious Territory
Stock Market Sentiment Indicator Moves Into Cautious Territory

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