Conference Board Consumer Confidence At New All Time Low

Published January 13th, 2009 in Sentiment Tags: bear market, conference board, consumer confidence, contrarian, inflection point, pessimism, sentiment, survey.

The Present Situation Index of the Consumer Confidence survey from the Conference Board fell to 29.4:

confidence board consumer confidence present situation Jan 2009

That’s lower than the 2002 bear market bottom. Lower than the confidence level in 1991. Lower than the early 1980’s. Even slightly lower than the darkest days of the 1970’s bear market.

As far as I can tell, the current reading is the lowest that this survey has seen since it was started in the 1960’s!

The Conference Board surveys 5000 US households and their answers to questions about their employment, spending and

From a contrarian perspective this is good news. And this is just another in a long line of extreme pessimism from the average consumer and investor in the US. But from another perspective we need to see at least the start of a change in the doom and gloom before things get better.

If you have a really long term view and don’t particularly care about further declines in the short term, then this is a good signal. But if you want to avoid such potential losses then you have to give up trying to anticipate the market’s exact inflection point and wait for confirmation by giving up some gains to the upside.