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Unrelenting Negative News in Media is Bullish for Stock Market From Contrarian Viewpoint

Unrelenting Negative News in Media is Bullish for Stock Market From Contrarian Viewpoint.  We use investor sentiment as a contrarian indicator on the direction of the stock market because historically they are wrong.  So, it is no wonder investors have been so skittish about the market in the face of  unrelenting negative news in the media. As such, the media has enormous influence although  the media  historically is wrong. The chart below from the San Francisco Federal Reserve shows how wrong-headed the media historically has been when compared with the direction of the S&P 500. While the media remains unrelentingly negative, investor sentiment indicators are in so-called “mid-range.” In other words, they are not flashing sell signals as they were last fall but heading in that direction. That to us means there’s still room for some upward market momentum.

Unrelenting Negative News in Media is Bullish for Stock Market From Contrarian Viewpoint
Unrelenting Negative News in Media is Bullish for Stock Market From Contrarian Viewpoint

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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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