Market Indicators - Investor Sentiment

» azxcvbnm - Re: Re: Alan Newman of CROSSCURRENTS Says

The NASDAQ certainly seems to be stalling right now. People are rotating out of tech and into oil, and other less risky investments. I think this bodes well for the bull market, but indicates that the market might be getting old. Caution with these valuations is always a must, but I still think we have higher to go.

-- posted by azxcvbnm

» lcha - Re: Alan Newman of CROSSCURRENTS Says

Here's my take. We have a large group of people set to retire over the next 20 years. They started saving late and were hurt with the collapse of the NASDAQ in 2000-2002. They are making 0.5% on their money in MM funds and 2-4% in their bond funds. These people HAVE to have a strong stock matket. They have no choice. It is the ONLY investment that they feel can generate the returns they NEED to keep off the Alpo plan when they retire. Stock market valuation does not mean a thing. They HAVE to invest in equities.

That's just my opinion, I could be wrong.

-- posted by lcha

» bob90245 - Re: Alan Newman of CROSSCURRENTS Says

O.K., I'll take a wild guess here. The 2000-2002 tech wreck was so utterly complete that once those stocks rebounded, they shot up far more than would be normal. So, many tech stocks have a long ways down to go before they may make a new low.

Take it for what it's worth - which may not be much.

-Bob-

[In edit: It would be helpful to see 1972-76 for comparison.]

-- posted by bob90245

» Laangaan - Re: Alan Newman of CROSSCURRENTS Says

" Comments Anyone?"

OK I'll bite. The chart is impressive. The graph is emphatic, even more so than Newman's comments. Certainly, to illustrate my question by an impossible example, if a chart for a session or period showed that ALL stocks reached new highs, and ZERO stocks reached new lows, I would conclude , (but what the hay do I know) that, for that session or period of trading, each trade was initiated by a 'buy' order; that no trades at all were initiated by 'sell' orders. (There may be variations to this, but its as far as I can take it without making my hair hurt.)

But reality lies between the extremes, where we all live.

So is there a report that shows exactly how many transactions, trades, of a given session or period, were initiated by orders to buy , vs, how many initiated by orders to sell?
Otherwise, should one infer from the chart that sellers have gone out to the lake, leaving only buyers to enter their orders, or watch and wait to enter buy orders.

I really dont know, but would really look forward to a critique by those who do this stuff regular.

-- posted by Laangaan

» Normxxx -

-- posted by Normxxx

» Normxxx - Re: Re: Alan Newman of CROSSCURRENTS Says

Strictly speaking, that info is not available, and cannot be, because in an auction market a sale is effected when seller and buyer have a 'meeting of the minds,' that is, neither 'initiates' the trade. In fact, one or the other will be more eager. So this is inferred by seeing whether the price moves up or moves down or remains unchanged. Up 'ticks' assume the buyer is more eager, down 'ticks' assume the seller is more eager, and no change assumes neither. Therefore, the net ticks or the tick ratio is used to determine selling or buying pressure. Decimalization has virtually eliminated 'no change' ticks, so current tick stats may not be comparable with the past.

Another method might be to see the ratio of 'sell at the market' orders to 'buy at the market' orders-- I don't know if those stats are available, I've never seen them or any reference to them.

Remember the stats are for new lows-- not for sell orders-- it just means that virtually all NASDAQ stocks have lifted off of their lows for the last 12 months and have not revisited that low and gone lower in the last 8 months or so.

This graph is just another anomally of this market. Is this market weirder than most? I don't know, but it would be interesting to find out, not that that is likely to tell you anything about what to expect, except more weirdness.

I guess the boomers have truly taken over the market and decided to make it theirs.

-- posted by Normxxx

» Normxxx - Bears slowly gaining upper paw?

When I last surveyed the geezers (my name for the letters who were around at the last bear market bottom in 1974) most had turned bullish. And the few holdouts, whom I've named "the grumps," were looking distinct strained. (See my Jan. 15 column.)

But for two months the broad market has moved basically sideways, and the Nasdaq is actually down.

The geezers haven't changed a lot. (See chart below). But for example, Standard & Poor's Outlook has moved 15 percent points of its 65 percent exposure to international stocks, although still on balance discounting signs of U.S. consumer pullback.

A high proportion of the grumps don't have Web sites, whatever that means. Their monthly bulletins have just snailed in. They are significantly more defiant than they were in January.

Joe Granville of the Granville Market Letter, whose recent bearish turn might seem the more credible because of his current good record, writes:

"Earnings are the worst of all indicators when it comes to market timing. What does Wall Street lean on? Earnings. That is the impediment that blocks its view. I've observed that a bullish market demands technical harmony. One of the first things that turned me bearish was when I saw that the Dow Transports were no longer following the market. That is disharmony."

Then Granville goes on to draw his celebrated parallel between market movements and the opening sequences of Bach's "Jesu Joy Of Man's Desiring."

He's currently predicting (quite moderately) that the Dow will break below 10,000 by April, rally back, and then break to "well under 9,500" by November.

Charles Allmon of Growth Stock Outlook is still basically out of the market. His current rationale includes the historically-low liquid asset ratio of mutual funds. He is scathing as always about what he calls "the 'bull market forever' crowd."

Walter Roleau of Growth Fund Guide writes that "the super bear market in the U.S. is in the vicinity of being 50% completed," although he thinks that persistent bullish psychology may ultimately result in a greater decline than he originally projected.

Roleau adds: "The market does appear to us to be in the process of building a mini-bull market top in the midst of a super bear market."

And then there's Richard Russell of Dow Theory Letters. Although a confirmed grump, he's highly Internet-savvy. In last night's e-bulletin to subscribers he wrote:

"Market seems to be waiting for something -- maybe the employment figures Friday. I continue to believe the market is dealing with a 'standoff' between the bullish forces of high liquidity and the bearish forces of overvaluation and world over-production."

Russell is officially out of the market.

-- posted by Normxxx

» Normxxx - Insider Sales Highest Since May 2001

Investors seem to be jubilantly pouring more and more money into the stock market, which has been on a tear after crumbling for nearly three years. Corporate insiders, however, are [still] using this strong rally to lighten their holdings of stock in their own companies.

In February alone, corporate executives sold $4.9 billion of stock in their own companies. This figure is nearly double the historic five-year monthly average and more than 50 percent higher than January's $3.1 billion, according to Thomson Financial.

[Normxxx Here:  This has been going on since May of last year. I assume all of these guys are trying to diversify. ]

-- posted by Normxxx

» SteveT - 3-8-34 Sentiment

II again moved slightly but AAII bulls increased a noticeable amount while the bears plunged and the neutrals jumped up significantly. VIX dipped a little more and so did the equity Put/Call 10 day moving average I report on. I decided to go back ten days and see what the Index Put/Call average is. During that time it has reached a low of 1.22 and a high of 1.95. The 10-day moving average Index Put/Call ratio is 1.49! I’ve been watching this difference between equity put/call and index put/call for a while. Could this mean the hedge funds and large institutions that usually use index options are buying more puts while the small individuals that normally use equity options are buying more calls? Maybe it means nothing. Maybe some equity money is being distributed from the large pros into the hands of some of the small individuals that have been sitting on cash and fear the year old bull market will go upward without them. We shall see.

I am using the VTO report for the II data. http://vtoreport.com/sentiment/sentiment...
Note for clarification historic sentiment tables are for that current week and not the four-week moving average.

Investors Intelligence Bulls 59.4% Bears 18.8% Correction 21.8%
59.4/(59.4+18.8)=75.96%
Four Week Average = 76.4%

A few historic dates: 7-20-98 68.42% 10-12-98 47.41% 4-3-00 67.79% 1-1-01 64.10% 4-4-01 58.91% 9-17-01 52.0% 9-21-01 48.7% 7-19-02 47.2% 7-23-02 47.2% 10-9-02 50.0%

Sideline Money Bears + Correction =40.6%
Four Week Average = 41.15%
hairie has researched some fascinating numbers for all time high bulls readings going back to 1965. http://www.suite101.com/discussion.cfm/i...
and lows from 1965-2003 http://www.suite101.com/discussion.cfm/i...

From Barron' s 3/8/04
The American Association of Individual Investors
Bulls 47.8% Bears 13.1% Neutral 39.1%
47.8/(47.8+13.1)= 78.49
Four Week Average = 71.42%

Historic dates for comparison:
7-16-98    44.3%        S&P 500 Close 1186.75
10-12-98   36.76%       S&P 500 Close  984.39
4-3-00     77.78%       S&P 500 Close 1505.97
1-1-01     58.82%       S&P 500 Close 1320.28
4-4-01     51.35%       S&P 500 Close 1103.25
9-10-01    47.34%       S&P 500 Close 1085.78
9-17-01    42.11%       S&P 500 Close 1038.77
9-21-01    41.08%       S&P 500 Close  965.80
7-19-02    32.88%       S&P 500 Close  847.75
7-23-02    32.88%       S&P 500 Close  797.70
10-9-02    42.36%       S&P 500 Close  776.76

As of March 5, 2004 close
The CBOE Put/Call ratio 10 day moving average is at .72. http://stockcharts.com/def/servlet/SC.we... The VIX Market Volatility Index closed Friday at 14.48. http://quote.yahoo.com/q?s=%5evix&d=t

-- posted by SteveT

» Normxxx - Re: 3-8-34 Sentiment

Steve: See
http://www.suite101.com/discussion.cfm/i...

Unfortunately, I don't have the latest "pure" put/call ratio.

-- posted by Normxxx