If you believe that investing activity will stay slow it would probably be smart to short the OLB sector. I haven't been trading as much now as I was in the up-market, simply because I'm a "long" and I'm more comfortable going "long" than "short". I contend that the trade volumes will return shortly, along with the market turn around.
This from another thread;
To:Wendisman who wrote (48384)
From: Fallope Sunday, Mar 4, 2001 3:31 PM
Respond to of 48389
Barrons[[[[[[[[[[[[[
The Survey Says
A drop in bullish sentiment may signal an imminent market rally
By Erin E. Arvelund
"The only thing we have to fear is the absence of fear itself."
If Franklin D. Roosevelt had spent his career in Wall Street instead of the White House,
these are the words he would have made immortal. When investors are fearless and
complacency reigns in the market -- recall the 1920s and, yes, the late 1990s -- stocks
almost always are poised to fall. Today, however, fear has the upper hand on the Street,
according to many of the surveys that measure bullish and bearish sentiment among
traders, investors and market newsletter writers. Indeed, several prominent polls last
week reported that the percentage of bullish respondents had dropped to extreme lows,
signaling that a powerful rally likely is in the offing.
Why are such sentiment surveys best read as contrary indicators? When people feel most
upbeat about stocks, they're usually fully invested. Conversely, when they're morosely
bearish, they're out of the market and hoarding plenty of cash. "The herd perpetually
drives prices to optimistic and pessimistic extremes," says Woody Dorsey, founder of
Market Semiotics.
Investors track dozens of sentiment indicators, including mutual-fund flows, volatility and
industryspecific statistics. Here's a look at the recent readings of some historically
prescient surveys.
Market Vane's bullish consensus has been published since 1964. The firm queries
commodities traders and investors in Standard & Poor's 500 futures contracts. Just 25%
of all respondents were bullish last week, right around the low of 23% seen in May
2000. That year, the market enjoyed a strong summer rally, and history could repeat.
Generally readings below 25% are bullish; those above 65% are bearish. The percentage
of bulls hasn't topped 39% since the November elections, says Richard Ishida, president
of the Pasadena, California, company. "We're looking for a bear-market rally," he
concludes.
Lehman Brothers technician Jeff deGraaf uses Market Vane in conjunction with the
Commitment of Traders report put out by the Commodity Futures Trading Commission.
Professional traders, he notes, generally invest at market bottoms and short at tops.
The CBOE compiles an equity put-call ratio-the total volume of equity put options
divided by call options. Readings of 0.60 are considered bullish and of 0.30 bearish,
because nervous investors rush to buy protection in the form of puts. The ratio generally
indicates the market's direction in the next two weeks. "It's popular because it's
accurate," says Jerry Wang. It's always the first thing we look for." Last week, the
put/call rocketed to 0.81 -- in other words, a hopeful sign. ]]]]]]]]]]]]] |
