Posts filed under “Sentiment”

Sell Side Indicator: Wall St’s Improving Optimism

Click to enlarge
Chart
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 its now up in “ten of the last thirteen months after hitting an all-time low of 43.9 last July, and is now at its highest level since April 2012, when it first flashed a “Buy” signal.

Here is Merrill:

Wall Street’s bearishness is still as bad as it was at the market lows of March 2009. Given the contrarian nature of this indicator, we remain encouraged by Wall Street’s ongoing lack of optimism and the fact that strategists are still recommending that investors significantly underweight equities at 53% vs. a traditional long-term average benchmark weighting of 60-65%. Even though the S&P 500 has risen nearly 20% since sentiment bottomed, history suggests that strong equity returns can last for years after the indicator troughs.

Note that the Sell Side Indicator is based on “average recommended equity allocation of Wall Street strategists as of the last business day of each month.” It has historically been a reliable contrary indicator.

 

Source:
Wall St Optimism Almost Back to March 2009 Levels
Savita Subramanian, Dan Suzuki, Alex Makedon, Jill Carey
Bank of America Merrill Lynch, September 3, 3013

Category: Contrary Indicators, Sentiment, Technical Analysis

Trusted Bank Brands Ladder

Click to enlarge Source:  Aspen Institute

Category: Credit, Sentiment

Five Bubbles?

The stock market has been choppy since mid-June, thanks in part to tapering talk and even more data that proves China is slowing down. MarketWatch’s Laura Mandaro discusses five bubbles investors need to watch

Five Bubbles Investors Need to Watch

Category: Markets, Sentiment, Valuation, Video

Wall Street (Still) Lukewarm on Equities

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

Category: Sentiment, Technical Analysis

Question: What Is Driving Hindenburg Omen Internals?

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

Category: Markets, Sentiment, Technical Analysis

What Do You Control?

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

Category: Investing, Sentiment, Trading

Don’t Be This Trader

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  

Category: Sentiment

Random Thoughts: Comebacks, Intraday Reversals and the like

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

Category: Investing, Markets, Psychology, Rules, Sentiment, Technical Analysis

Percentage of SPX Stocks Over 200 Day Moving Average

Renaissance Macro Research, May 14, 2013   Jeff deGraaf, technician extraordinaire (formerly of Lehman now at Renaissance Macro Research) makes an interesting observation about the heavily overbought markets. Last week, the S&P500 had ~93% of all stocks trading over their 200 day moving average. Normally, this degree of overbought should lead to a correction. As…Read More

Category: Markets, Sentiment, Technical Analysis

Habits of the Bear, Bull Markets and Agency Issues

  “If you’re bullish and wrong, you usually have plenty of company. But if you’re bearish and wrong, it’s almost unforgivable.” -Bob Kargenian, TABR Capital Management, Barron’s DECEMBER 15, 2012     The above quote from Barron’s has been on my mind for a while. I thought of it again as the markets have made…Read More

Category: Investing, Psychology, Sentiment, Valuation