No doubt, everyone is watching these indicators, but no more so than all the professional investors did at the bottom of the bear markets in '87, '90, '94 (bear primarily in tech) and '98. Those professionals still panicked at the bottom.
A few things are different now than at any time in this 19 month bear. First, all the sentiment indicators are flashing signals at the same time. In April 2000 and again in April 2001, we had some of those signals, but not all, and even then, those signals were not anywhere near the extreme levels we have seen today and this week. Indeed, the put/call ratio peaked at about 1.05 or something like that in those two Aprils. This week, it hit a little above 1 on Mon and Tues before going through the roof today to 1.2, which as I recall was similar to the peak in the 1987 crash. That level as you know is almost unheard of. Second, numerous other, secondary indicators suggest a bottom is near. For instance, on Monday, NYSE volume actually surpassed Naz volume for the first time since the 1998 bear. There are others, but you get the idea. All the best.
RK |
