4 replies to this topic

[OEXCHAOS]

Here's a historical Chart. It's a cause for concern, but not a lock.

[NAV]

Mark, What am i missing here ? The bullishness between 83 and 86 was way higher than what it is today and yet it was a great bull market. Someone who had shorted then based on this survey would have lost their shirt. Today's numbers pales in comparison with that era.

Edited by NAV, 17 October 2007 - 11:21 AM.

[ken29]

Mark, Doesn't the II Bull/Bear weekly in the last 5 years looks like the 5 years period of 1983-1987, or am I not reading this right?

[thespookyone]

THX for the heads up!

[OEXCHAOS]

Mark,

What am i missing here ? The bullishness between 83 and 86 was way higher than what it is today and yet it was a great bull market. Someone who had shorted then based on this survey would have lost their shirt. Today's numbers pales in comparison with that era.

Nav, you're not missing anything.

THIS is why so many folks think Sentiment "doesn't work". A high level of Bullishness in one measure is not anything like a lock on a top. In fact, it's almost meaningless, UNLESS you get a bit of confirmation and a turn in both price and breadth.

I look at sentiment in 3 loosely defined segments; Amateur Investors, Amateur Speculators, and Hedge Funds. There are reasons for this that I won't go into here, but suffice it to say there's a logic to it. Any one sector being overdone is adequate fuel for a corrective move, but isn't a major indication of such a correction. It's just a set up. Once confirmed by breadth and price, you can play for it. When all three sectors are leaning hard in the same direction, well, then you have to start playing for a move. Especially when they're all beared up.

I always confirm each sentiment sector, too. One poll isn't enough.

There are other tricks but I'll save those for the payin' customers.



Mark