Here are the complacency indexes. They go against the grain this evening, since they're both curiously bullish (in the short term).
The Naz CI rose from 33.54 Thursday to 39.07 Friday. It's trending up, after reversing from 22.79 Wednesday.
Note how it went up on a down day for the Naz. Lurking beneath the lower Nasdaq index was some bullish sentiment apparently. Maybe MSFT will do Monday what IBM did today (rally). Then again, maybe it won't. I really have no idea.
The Naz CI is for the short term (with trends lasting a week or two). Paul asked about longer-term complacency indexes. If I make it for trends lasting several months, it's a different story. The Naz CI in that time frame is now at 74.05.
In that longer-term time frame, the CI maxed out at 98.49 on 6/29, and it's been moving down (bearish) since then. The most recent extreme low (under 10) before then was on December 20, when the longer-term CI hit 0.
Looking back, the long-term CI hit 100 for several days in a row at the end of August 2000. It was also high in June and July 2000.
I suppose it suggests that longer-term, the overall view is too complacent. That's a bearish outlook for the future.
Moving on to the S&P:
The shorter-term S&P CI is at 40.75, up from 21.88. It reversed Friday, giving a buy signal.
Why did it reverse on a down day? Because for some reason, there was some bullish sentiment, despite the lower SPX.
Longer term, the S&P CI is at 78, up from 71 the day before. It had been moving down for several days, since hitting 99.8 on July 2, but now it's heading up again. It seems to be showing that the market is too complacent longer term. That's bearish.
Dancing and drinks on the main deck half an hour from now. DMP has been kind enough to open his wine cellar for the event. (Well, maybe not. I guess it's BYOB.) |
