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Could sentiment get any worse?


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#1 Rogerdodger

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Posted 17 March 2023 - 10:55 AM

Weeks ago I asked "Where are all the bears?" as the AAII was at the top...and so was the market.

Now sentiment may be bottoming...or the bottom is getting ready to fall out.

(Is the recent spike in price similar to early September's spike and fail?)

2023 so far looks a lot like the 2022 June through September pattern.

But will we also see a fall like October 2022 with even lower sentiment?

 

Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index dropped to 63.4, down from February's revised reading of 67.0. the data missed expectations as consensus forecasts called for a roughly unchanged reading of around 66.9.
The report noted that sentiment could actually be a lot worse as the survey didn't incorporate the growing U.S. banking crisis, which started last week after U.S. regulators took over Silicon Valley Bank

.Sentiment.jpg

 

.Sentiment-2.jpg

.


Edited by Rogerdodger, 17 March 2023 - 01:10 PM.


#2 skott

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Posted 17 March 2023 - 11:32 AM

Mark Hulbert did an article on this. He said newsletter writers have not thrown in the towel. Not sure but I think he thinks just a retest of the Oct lows.



#3 EntropyModel

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Posted 17 March 2023 - 12:47 PM

yes


Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data. I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'. Market Comments https://markdavidson.substack.com/?utm_source=substack&utm_medium=email https://www.youtube.com/playlist?list=PLznkbTx_dpw_-Y9bBN3QR-tiNSsFsSojB

#4 EntropyModel

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Posted 17 March 2023 - 01:42 PM

yes

 tongue.png

 

I don't see any fear yet - none ...the only fear I see is FOMO as 'pivot FED's or 'End of QT' or 'Interventions - the WORSE the CRISES the more BULLISH RETAIL GETS knowing

from last 23 years the 'white knight' always saves the day - except, of cource the times they didn't. ...but 2020 and 2018 are two most recent in most minds - its 'recency bias', where they did...have to

go back to 2008 and most can't seem to remember that long.

 

The Slope of Hope is the strongest i've seen in my trading career since 1998 - which suggests to me, this bear market is going to be longer, deeper than any in that timeframe but I reserve

the right to change mind if this changes.


Edited by EntropyModel, 17 March 2023 - 01:43 PM.

Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data. I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'. Market Comments https://markdavidson.substack.com/?utm_source=substack&utm_medium=email https://www.youtube.com/playlist?list=PLznkbTx_dpw_-Y9bBN3QR-tiNSsFsSojB

#5 linrom1

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Posted 17 March 2023 - 01:47 PM

Agree. Until they stop buying BTC, NVDA, ADM some bullish AI narratives, the sentiment is way too bullish.


Edited by linrom1, 17 March 2023 - 01:48 PM.


#6 Douglas

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Posted 17 March 2023 - 02:07 PM

Rogerdodger, the TSP Talk bull-bear sentiment number is currently worse than at the bottom in 2009 and the lowest in my data set as shown below, so, no, bearish market sentiment surely can't worse.  A bounce is probably in order if the bad banking genie is back in the bottle.

 

99h5taA.jpg

Regards,

Douglas


Edited by Douglas, 17 March 2023 - 02:08 PM.


#7 EntropyModel

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Posted 17 March 2023 - 02:51 PM

Rogerdodger, the TSP Talk bull-bear sentiment number is currently worse than at the bottom in 2009 and the lowest in my data set as shown below, so, no, bearish market sentiment surely can't worse.  A bounce is probably in order if the bad banking genie is back in the bottle.

 

99h5taA.jpg

Regards,

Douglas

 

Nice Data & chart Douglas, thx for posting it.

 

TSP  is one poll I follow -  I would point out

 - the devil is in the detail - if you zoom in, those 'lows' don't line up exactly with the market and BIG drops can occur before the turn ..and there are often multi week low readings 

 - I've had the AAII polls thrown at me 'look, its so bearish it must be bullish' more times than I count since bear began, people ignore the fails (many now)  with big drawdowns, polling has NOT been as useful in this bear market for reasons i've discussed, that people are 'saying i'm bearish' but FOMO means they are 'long and strong' in Data I follow (real money data, not polls).

 

In this case as well - the TSP is polled last friday, which was day of banking panic ...it hasn't had low reading for many weeks ...i'd be interested to see tonights..I bet it jumps up on this weeks bounce.

I would be interested to see a 2-3 week moving average ..versus 1 week lows in that poll - from my observations of the data multi week drops are more meaningful to remove skew due to 'news' like last friday.


Edited by EntropyModel, 17 March 2023 - 02:52 PM.

Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data. I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'. Market Comments https://markdavidson.substack.com/?utm_source=substack&utm_medium=email https://www.youtube.com/playlist?list=PLznkbTx_dpw_-Y9bBN3QR-tiNSsFsSojB

#8 slupert

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Posted 17 March 2023 - 03:39 PM

Weeks ago I asked "Where are all the bears?" as the AAII was at the top...and so was the market.

Now sentiment may be bottoming...or the bottom is getting ready to fall out.

(Is the recent spike in price similar to early September's spike and fail?)

2023 so far looks a lot like the 2022 June through September pattern.

But will we also see a fall like October 2022 with even lower sentiment?

 

Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index dropped to 63.4, down from February's revised reading of 67.0. the data missed expectations as consensus forecasts called for a roughly unchanged reading of around 66.9.
The report noted that sentiment could actually be a lot worse as the survey didn't incorporate the growing U.S. banking crisis, which started last week after U.S. regulators took over Silicon Valley Bank

.Sentiment.jpg

 

.Sentiment-2.jpg

.

Bulls were confounded by  AAII's accuracy last year because it was such a slow moving train wreck, investors easily identified the risk in front of them, adnd were correctly bearish. This year its attrition, Wall Street is refusing to buy until we test new lows, I would be surprised if we  didn't at least test the Dec. lows of 3870. (JMHO)



#9 Douglas

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Posted 17 March 2023 - 04:40 PM

EntropyModel, ask and thou shalt receive.   Below are moving averages of TSP Bull-Bear sentiment (3 week) and AAII Bull-Bear sentiment (4 week) which I track.  Bollinger band process used to find top and bottom extremes since the range varies over time.

 

82mFo5Y.jpg

 

qoWB0Sq.jpg

 

Regards,

Douglas



#10 EntropyModel

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Posted 17 March 2023 - 04:49 PM

Thx Douglas 

 

Yeah - that sort of confirms what I see in the data.


Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data. I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'. Market Comments https://markdavidson.substack.com/?utm_source=substack&utm_medium=email https://www.youtube.com/playlist?list=PLznkbTx_dpw_-Y9bBN3QR-tiNSsFsSojB