Market Sentiment

As the indices accelerate to the downside — the Dow Industrials are off 240 points as I type this — its as good a time as any to look at the current market sentiment.

These provide a snapshot into when traders and investors get too greedy or fearful. Typically, you can use these measures as a useful short term metric for timing entries and exits. 

And, these data points are much more reliable than the typical anecdotal sentiment discussions: "markets should selloff (rally), ’cause everyone I know is bullish (bearish)."

>

 CBOE Equity & Index Put/Call Ratio

Put_call_ratio

>

AAII Investor Bullish Sentiment Survey

Aaii_jan_08

>

AAII Asset Allocation Survey

Aaii_asset_allocation_survey

What do these charts suggest?

This sentiment data implies that bearishness is getting very negative. Its not at the point where a rally is absolutely imminent, but we are slowly moving in that direction.

>

~~~

Here’s our full report today: (click to open the full PDF)
Fusions_Analytics_Equity_Market_Review_Jan_2nd_2007.pdf

~~~

For those of you who haven’t signed up yet, here’s the code for the free trial:

Go to the Fusion IQ home page , then select Subscribe. On the signup page, you will see a line that says Discount Code –  enter "BIGPICTURE07"

and click on update.  The
first 30 days trial is free, but you will need to enter a credit card
number — as long as you cancel before 30 days hence, you won’t get
billed.

 

Category: Contrary Indicators, Markets, Psychology

Crude Oil = $100

Category: Commodities, Energy, Technical Analysis

Yearly High to Low in One Day!

Category: Markets, Psychology, Technical Analysis

New Column up at Real Money (01/02/08)

Category: Apprenticed Investor, Corporate Management, Investing, Markets, Technical Analysis, Trading

Odd Data Point of 2007

Category: Markets, Technical Analysis

2007 Performance Review

Category: Investing, Markets

New Year’s Day Open Thread

Category: Federal Reserve, Markets, Psychology

Happy New Year

Category: Contrary Indicators

Can I Stay Up Late?

Category: Real Estate

Performance of Commodity Sub-Groups

Category: Commodities, Energy