Friday Market Sentiment
Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |
I believe this was the first day this year where the NASDAQ new highs closed above 50, and where the number of new highs were greater than the number of new lows. It wasn't by much, but it is a start and is helpful for the market going forward. I turned cautious on the market early this week because of the unhealthy level of new lows, but I didn't sell any stock holdings and remain fully invested in stocks and commodities. I'm not ready to switch back to bull yet. Let's see how the market breadth numbers are early next week and then re-evaluate.
Looks like the bloggers and individuals have regained their skepticism towards the market. They join the newsletter writers well into the zone of extremely low bull sentiment. These readings continue to work strongly in favor of higher stock prices ahead from a contrarian point-of-view.
Great charts from Market Harmonics. These charts show just how deep the skepticism is towards stock prices.
The survey information below can be obtained for free via the following sites. Investor's Intelligence is from Market Harmonics. Individual Investors is from aaii.com. Birinyi Bloggers is from Ticker Sense. For additional information about market sentiment, I recommend Brent Leonard's market sentiment blog.
Sentiment analysis is an important component when following the markets, and is considered a “contrary” indicator. Contrary because if too many people are bearish then there aren't enough sellers left, the balance tips to buyers, and the market starts to advance. If too many people are bullish, most funds are already invested, the balance tips to sellers and the market weakens. One way to determine if investors are bearish or bullish is by taking surveys and tracking at what levels these polls indicate investors are at the extremes of bearish or bullish sentiment.
Keep in mind, sentiment analysis is not a science and only provides very general information. Sentiment is not a signal to take action, but provides background about the current state of the markets. For instance, there have been many occasions when bullishness reached high levels well before the market started to weaken.
You are not ready to switch back to bull yet? But you are have been long stocks and still holding, but hey, you were cautious early last week long stocks... :)) With all do respect, your comments are a lil to confusing. (Comment this)