rampant boolishness out there?????.....not....ARE U BOOLISH....is Bernie boolish???..lololol
INVESTORS INTELL........
Overview
Despite many index highs the past week, there was a further decline in advisor optimism, with the bulls falling to 42.6%. That was down from the previous 45.3%, and the bulls have dropped six weeks in a row. The bears advanced to 30.8%, up from 29.5%, and their seventh consecutive weekly gain.
Those calling for a correction moved up to 26.6%, from the previous 25.2%. This group is short term bearish, but view pullbacks as buying opportunities, and long term expect the market to go up. A complete table of the Advisory Sentiment appears on the final hotline page.
The current sentiment is now at levels shown at market lows over the past two years, with bulls near 40% and bears around 30%. This is a dramatic shift from the end of 2005, when bulls were 60% and bears about 20%. High bullish levels often prove negative for the market, because a rally is required for extreme optimism, and generally most investors are then fully committed. The start of a new year is an exception, as new funds are available, postponing the decline. High levels of bearishness are positive and only occur after a major market decline.
On a historic basis, though, market bottoms have occurred with more bears than bulls, but that has not taken place since October 2002. Readings close to today’s were shown in October and April 2005, and August 2004. During the range bound market over the last few years buying opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded. A wide difference around 40% has proved negative.
The current spread between the bulls and bears narrowed to 11.8%. This is low enough to signal a buying opportunity, after it begins to increase. The difference was a bearish 39.6% just nine weeks ago, and over 40% at the end of 2004. |
