Looking at some sentiment numbers – positive Monday opening due to smaller snap back

Market Sentiment

Consensus Index
Consensus Bullish Sentiment 36% 21% 26%
Source: Consensus Inc., P.O. Box 520526,Independence, Mo.
Historical data available at (800) 383-1441. editor@consensus-inc.com
AAII Index
Bullish 40.9% 31.5% 33.3%
Bearish 39.8 60.8 55.0
Neutral 19.3 7.7 11.7
Source: American Association of Individual Investors,
625 N. Michigan Ave., Chicago, Ill. 60611 (312) 280-0170.
Market Vane
Bullish Consensus 38% 33% 39%
Source: Market Vane, P.O. Box 90490,

The numbers are the most recent one on the left the prior week in the middle and 3 weeks ago on the right.

The Rydex had a significant rise within a bearish scenario (top chart), which means we have space to drop lower. The other readings in the columns improved also a bit. Only Investor Intelligence got more neagtive, with the bulls decreasing from 25.3 to 22.4, with bears almost unchanged at 52.9 after 53, which are extreme readings.

Excerpt from Barron’s:

With the options-market’s volatility index pinned at once-unthinkable levels for more than a week, with small investors dumping their stock funds in 11-figure weekly dollar volumes, with executives’ margin calls fueling the sell-at-any-price action, we know folks were and are fearful. Ned Davis Research noted last week that its Crowd Sentiment Poll logged a more extreme pessimistic reading than at the 2002 market low.

Well some weekly or more so monthly indicators are not at the same extremes but close and these readings or indicators do not have a spot-on it’s “time to buy” timing. My most crucial indicator is though at real bottoms, you barely will find a group of cheerleaders to invite you to make a killing.

Buffett is wrong for 25% already and the $40 -50 bil. in cash he holds is just a nominal number, since he holds the same amout in short puts. Hence, if markets keep dropping like in 1929, he is already fully invested at much too high of levels. So right now he does not stick out as the smartest investor, since he also sold a very low VIX levels, he has very high losses after mark to market models – I would roughly estimate around $10 bil.. Even the cover story of Barron’s tries to paint an obscure and pathetic relatively positive picture – but since Murdoch took over the WSJ the quality of the Barron’s sucks.

The positive opening of today’s market is basically due to the same effect as last week only on a smaller scale. Most markets closed below weekly Bollinger Bands and the reflex to jump back in is natural but only of short nature as the natural momentum takes over usually.


~ by behindthematrix on October 20, 2008.

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