Trader’s Narrative

A big question on a lot of minds is whether what we are seeing is just the run-of-the-mill bear market reaction (a bear market rally or “dead cat bounce”) or whether perhaps this is the start of a brand new bull market.
While I do have some ideas, I’m not sure myself. Well, no one really […]

Here’s this week’s sentiment summary:
NASDAQ:NYSE Volume
I touched on the relative lack of volume and how this has historically marked tops, rather than spurred on rallies. Another troubling volume development is the ratio of volume on the Nasdaq compared to the NYSE. We are seeing a spike in this ratio, meaning that Nasdaq volume is significantly […]

The sentiment landscape has changed much from just a month ago:
Sentiment Surveys
The AAII sentiment survey came in this week at 53% bulls - unchanged from last week. Not only is this a very high bullish reading for this indicator, it is the level at which the market topped out last October. Furthermore, the fact that […]

Here is the lay of the sentiment land for the week:
Barron’s Institutional Survey
According to the latest Barron’s “Big Money Poll”, the professional investors are fairly bullish but not excited about stocks (see graph). But the majority, 55%, believe the market to be undervalued.
And 87% say they see themselves as buyers within 3-6 months. […]

Here is this past week’s important sentiment data:
Stock Timing Newsletters
The Hulbert Stock Newsletter Sentiment Index (HSNSI) was at 27.5% at the start of the week. Meaning that the average stock timing newsletter was recommending to their readers that they be long the equity market with 27.5% of their portfolio. This is where they were the […]