Whereas Tommy Bear did do an excellent sentiment analysis, he has concentrated on the Investors Intelligence Survey, which measures "guru opinion", i.e., the newsletter writers. I prefer to watch what people are actually doing with their money. A 5-day moving average of the CBOE Equity Put/Call ratio indicates that options players are, in fact, more bearish than newsletter writers, and have gotten more bearish lately (well, yes and no). However, this observation is tempered by the fact that the 5-day moving average has made a series of peaks (10/18/00, 11/22/00, and 12/20/00), each of which was slightly lower than the one before. So options players are somewhat bearish, but have not gotten more bearish as the decline has proceeded.
Overall, I agree with Tommy Bear: the big capitulation is still out there. |
