Bullishness Indicator:
From trading-ideas web site
One area of concern is the increased bullishness among investment advisors. Investor's Intelligence reported that 57.0% of advisors
are now bullish, up from 53.1% last week. This is the highest level of optimism since Jan. 17, 1992. Bearish sentiment fell to 31.6%.
When optimism rises to extreme levels, it indicates that majority of investors is already invested and there is very little money left on
the sideline. This would indicate that we might be getting close to some correction. Back in October, bullish sentiment fell under
30%, indicating money on the sideline and a series of good news hit the market (rate cuts), buyers got back into stocks in a hurry,
which led to the huge rally. Now, we are seeing just the opposite. While sentiment indicators are at high levels, they can remain at
that level for some time. Nonetheless, there are warning signs, despite solid uptrend among major averages.
Something to think about.
Cya |
