Here’s something you don’t see every day! The Ticker Sense Blogger sentiment poll is actually bullish. You know what that means, right? Run for cover! Hide the women, children and your portfolio!!
I’m just having a bit of fun with them. It’s just that constituents of the Ticker Sense Blogger sentiment poll - on average - are a cautious bunch (polite term for permabears). So we very rarely see the bulls outnumber the bears in that poll. In fact, since starting in July 2006, this has only happened 4 times. Which means that for more than 90% of the time, this measure shows varying degrees of bearishness.
Here’s a chart showing the four times that bulls have outnumbered the bears in the Ticker Sense blogger sentiment poll (green dots):
The first two times when the bulls peeked from under the covers were quite good calls. The market went on to continued gains. The February bullishness though should have been taken as a contrarian signal. And what about this most recent bullishness?
Well, you can’t take any indicator or sentiment measure in a vacuum. But I do see a few clouds forming on the technical horizon. Nothing too worrying, but it does seem that the bounce from the March bottom has run its course and we may see some contraction as the indices rest to digest their move up.
In mid March I considered the question whether the dip would be followed by a bounce or a significant intermediate bottom (I had no qualms that it was an inflection point):
My conclusion after all this is that we are probably seeing a short lived bounce here. We need more capitulation to launch another leg up. So be careful out there.
The bounce has completed as the indices have returned to their prior swing highs. But now the cumulative tick (or its approximation via a short term average of the TICK) as well as the percentage above moving averages are signalling caution. So as much as I’d hate to disagree with Ticker Sense’s consensus of trading blogger’s bullishness, I don’t think it is prudent to press the long side here and now.
The time to go long was in early to mid March.
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