Trader’s Narrative

The Investor’s Intelligence Long Term Composite Indicator is a proprietary indicator generated from the scores awarded to over forty indicators. These indicators have been selected across a wide range of disciplines covering index trends, breadth, sentiment, money-flow and financial/economic factors. The scores awarded to each indicator are weighted to create an indicator that generates signals at market extremes…

The last time this aggregated indicator reached similar extremes were in August 2007, summer of 2002, and October 1999. So although the II sentiment measure is stubbornly stuck in bullish mode, their Composite indicator is most definitely flashing a buy signal.

My guess is that it is because of the rapidity of the decline as well as the low bullish percent indices for so many sectors.