Trader’s Narrative

This past week we didn’t really see any significant change in the usual sentiment measures:

LowRisk.com, which was showing a very lopsided bearish opinion (59%) mellowed out as some bears moved over to the neutral camp, reducing their numbers to 44%. Meanwhile, the bulls remained almost unchanged (38%).

Even less change happened in the Investor’s Intelligence survey with neither bulls (41.6%) and bears (32.6%) really budging from last week.

The Consensus survey continued to drop this week reaching 25%. We haven’t seen this measure this low since the summer and winter of 2004. Just a few weeks ago Consensus bullishness was at 47%.

For those unfamiliar with this survey, a little background: Consensus aggregates the sentiment and recommendation of several hundred analysts and independent advisory services. If I don’t mention it, you can find it each week buried in the bowels of Barron’s.

Although it is now at a multi-year low, during the aftermath of the 9/11 terrorist attacks it reached as low as 10%. I don’t think it is fair though to ask that it plumb those depths again in anything but extraordinary market circumstances.

The CBOE equity only put/call ratio back off the Tuesday (February 5th, 2008) high of 0.95 to finish the week at just below 0.80 - elevated levels of concern but not really panic.

The only other noteworthy event is the position of the retail futures traders. But this isn’t really a sentiment measure so much since they have already “put money where their mouth is”. I’ll go into the details for it on Monday. See you then.