Dennis, the many bears alas, are a fairy tale. Rydex ratios are at very low levels and overall CBOE put/call ratios are hitting all time record lows regularly of late. the OEX p/c ratio remains bullish, however, OEX option volume is at all time lows. adjusted for stock splits, short interest is also at a historically extremely low level. the sentiment polls are not at extremes, although the AAII bull/bear ratio hit a multi year extreme one week ago. the investors intelligence poll has had it's most extreme year in it's history in '99. while the readings improved somewhat during the October swoon, we're back at 53% bulls, approximately 8% above comfort level. Consensus Inc. readings were neutral last week (49% bulls) but went from a bullish 20% to a bearish 60% in four weeks off the October low, not really inspiring.
we may have to wait for more extreme levels in the polls before things really become dicey, but Shaeffer's claim of many bears being still extant is clearly wrong.
the most striking feature of this years sentiment polls is that in spite of the abysmal deterioration in market internals we had some of the most extreme readings ever, over extended time periods.
the poll data are not useful for timing, but they suggest that the longevity of the bull market has induced a lot of complacency, clearly a warning sign for long term investors.
regards,
hb |
