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Sentiment Overview: Week Of July 10th, 2009 at Trader’s Narrative

It is Friday, time for this week’s sentiment summary:

Sentiment Surveys
The Association of American Individual Investors’ weekly sentiment survey had the bulls at 28% again (a decline of 10% points) and the bears increased by the same amount to 55%. This definitely moves sentiment towards real pessimism. The bull/bear ratio is almost equal to late February. But we aren’t quite at an extreme point - yet.

In contrast, there is not much excitement in the weekly Investors Intelligence survey as it is almost unchanged from last week. The optimists number 42.7% and the pessimists 30%.

ABC News/Washington Post Consumer Comfort Poll
Although the Reuters/University of Michigan Consumer Sentiment survey is the most popular measure of the economic mood of the average American, there are a few others. One of these is the ABC Newss/Washington Post Consumer Comfort Poll which has been conducted for almost 24 years, every week.

In contrast to the recent Reuters/Michigan Consumer data, this poll shows that US consumers are losing confidence. The past 3 weeks have it hovering at -50. In its entire history, it has only spent 14 weeks below -50 (with 8 out of those 14 occurring this year!). If this pace continues, it will be the worst year for this indicator yet.

consumer comfort index chart July 2009 alt
Source: ABC News

Here is the chart for the Personal Finances sub-index which fell to a record low of -22 (percentage scale, not points scale). That’s even lower than in March 2009 when it was only at -4:

consumer comfort index chart July 2009

Rasmussen Index
Another measure of consumer economic sentiment is the Rasmussen Index. This survey is conducted every day so it is even more granular. After hitting a low in March 2009 that corresponded to the start of the spring rally, both the Rasmussen Consumer Index and Investor Index recovered along with the stock market. But now, they are once again falling.

As of today, the Rasmussen Consumer Index has fallen to 63.3 the lowest level since March 10th, 2009. The Rasmussen Investor Index is slightly more robust, having hit a four month low at 69.5 yesterday. To provide some perspective, the Consumer Index’s maximum was 127 reached in early January 2004 and its minimum, March 2009, at 54.7. The Investor’s Index’s maximum was 150.9 reached on early January 2004 and its minimum, March 2009, at 52.5.

Options Sentiment
The CBOE equity only put call ratio is showing movement from complacency towards apprehension:

cboe equity only put call ratio july 2009

The CBOE equity only options data suggests that we are rolling over, dovetailing with the breadth measures as well as the head and shoulder pattern in the major indexes.

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2 Responses to “Sentiment Overview: Week Of July 10th, 2009”  

  1. 1 Investorsconundrum

    I’m surprised about the quantity of diferent investment and economic indicators do you have babak. Thanks for your excepcional information.

  2. 2 Babak

    You’re welcome, I’m glad you found it useful.

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