Posts filed under “Sentiment”
The pushback to yesterday’s chart (Sell Side Indicator: Wall St’s Improving Optimism) was rather fierce. Whether that reflects confirmation bias on the part of under-invested readers is unknown.
But to provide equal time and to make sure that I am not engaging in my own confirmation bias, consider the chart above. It comes from the other Bianco — David Bianco of Deutsche Bank. It “compares the price-earnings ratio for the Standard & Poor’s 500 Index with this quarter’s average close for the Chicago Board Options Exchange Volatility Index. (The VIX is based on S&P 500 options).
Bianco’s P/E-VIX shows a lack of concern as of August 9th. He noted that “while stocks have room to extend their advance since March 2009, increased volatility is likely to accompany any further gains.”
There you have it: Stocks may rise relative to earnings but we should be prepared for more price swings.
Bloomberg, August 14, 2013
Consumer Confidence: A Useful Indicator of . . . the Labor Market? Jason Bram, Robert Rich, and Joshua Abel Liberty Street Economics Consumer confidence is closely monitored by policymakers and commentators because of the presumed insight it can offer into the outlook for consumer spending and thus the economy in general. Yet there’s…Read More
Click to enlarge Source: Merrill Lynch/BoA This is an interesting chart: Improving Wall Street sentiment is still no where near the levels associated with excessive sentiment. Despite the ongoing rally — or perhaps because of it — we are now all the back to the levels enjoyed at the lows in March 2009. Merrill notes…Read More
Click to enlarge Merrill Lynch continues to point out that the Street remains unenthusiastic about stocks: Sentiment ticks up to highest in 13mos, but still far from bullish The Sell Side Indicator — our measure of Wall Street’s bullishness on stocks — ticked up just slightly in June to 49.8 from 49.6. The…Read More
Source: Stockcharts Definition: Hindenburg Omen is triggered when: (1) more than 2.2% of stocks on the NYSE are at 52-week highs AND more than 2.2% are at 52-week lows, (2) the 50-day moving average is trending higher, (3) the McClellan Oscillator is negative, and (4) new 52-week highs don’t exceed new lows by…Read More
During this past month, we have seen significant moves up and down. Volatility has risen; there have been some scary drops in Asia, and some follow through selling (more or less) in the US. We have seen small measures of over-reaction, along the lines of “What do I do? What should I do? Should I…Read More
Via Trader Habits, here’s another graphic to add to our massive collection of Sentiment Cycles (here, here and here): Don’t Be This Trader
Since it is a Friday before a 3 day holiday weekend, it is a good time to kick back and think about what the recent market action might (or might not) mean. • Most Day-to-day market action is noise, There is very little signal involved, with the vast majority of commentary simply after-the-fact rationalizations of…Read More