Posts Tagged ‘Bearish Sentiment’

Bearish Sentiment Officially Reaching Fever Pitch

Bearish Sentiment Officially Reaching Fever Pitch

Courtesy of Joe Weisenthal at Business Insider 

sweaty biz man

Image: George Eastman via Flickr

Friday promises to be a huge day (at least in the early going) with both the Fed and the Q2 GDP revisions potentially giving investors more reasons to panic. The questions: is panic hitting peak levels?

Mike O’Rourke at BTIG argues that we must be close:

The German-built dirigible 'Hindenburg' (Zeppelin LZ 129) catches fire in the stern while trying to land at the Lakehurst Naval Air Station, New Jersey. People watch from below, standing on the mooring mast and on the ground. The ship was engulfed in flames and crashed in less than a minute. Thirty-six people were killed in the disaster.   (Photo by Hulton Archive/Getty Images)

The other interesting development today was on the sentiment front.  AAII Sentiment as we calculate it (Bulls/(Bulls + Bears)) was 29.54% in buy signal territory.  It is not as good as the reading registered last month, but good enough to rank it 4th best in the last two years following November 6, 2009’s reading of 28.57%, July 9, 2010’s 26.84% and the two decade low registered March 6, 2009 at 21.21%.  The Hindenburg Omen made it to the front of our Yahoo! News page. A six basis point increase in the quarterly report of the Mortgage Bankers Association’s 30 day delinquencies was covered in the media as if the second sub-prime crisis was again upon us.  Besides the fact that it was 6 basis points, it is coming primarily from failed modifications.  We get monthly snapshots from Lender Processing Services and Bloomberg so there are no shocking revelations in the MBA report, which overall exhibited improvements.  Meanwhile, positive stories seem to get missed, such as Moody’s asserting yesterday that credit card losses have peaked even if Unemployment rises to 10%.  In addition, Moody’s noted that “Falling charge-offs led to excess spread widening by 57 basis points to 10.44% in July, breaking the 10% level for the first time in the 20-plus year history of Moody’s Credit Card Index.”  This is the good type of spread widening.  It represents the profits banks make on a card program.

 There are only two things we feel like we are missing going into tomorrow’s GDP report: Volume and a 30+ reading on the Vix.  The ideal setup for tomorrow would come from the result of an ugly Q2 GDP revision tomorrow.  Every hour, a tenth of one percent comes off the market’s expectations of tomorrow’s revision.  It is hard to remember the last time the market was so enamored with a backward looking number.  We recognize a large downward revision will


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Bearish Sentiment At 22-Year Low

Bearish Sentiment At 22-Year Low

Courtesy of Adam Sharp’s Bearish News

The latest sentiment reading by Investors Intelligence shows a disturbing trend. Only 15.6% of financial newsletters are currently bearish on equities.

Last time the bearish indicator was this low was April 1987. A few months later (Black Monday) the DJIA dropped 21% in a single day:

In other words – when everything seems peachy — watch out. Turns out that peaks and troughs in investor sentiment are pretty good contra-indicators. Bullish sentiment tends to peak as bubbles are near their top, and vice versa.

From the revamped and newly Bloombergesque Business Week:

Bull standing on pile of coins, snorting

Pessimism about U.S. stocks among newsletter writers fell to the lowest level since April 1987, six months before the equity market crash known as Black Monday, following the biggest rally in the Standard & Poor’s 500 Index in seven decades.

The proportion of bearish publications among about 140 tracked by Investors Intelligence fell to 15.6 percent yesterday from 16.7 percent a week earlier. Sentiment has improved since October 2008, when the financial crisis drove the figure to a 14-year high of 54.4 percent. After plunging 38 percent in 2008, the S&P 500 has risen 25 percent this year.

This is not to say markets wont’ run again in 2010. Irrational bull markets can last much longer than you’d think. The momentum they build up is impossible to fight. Gotta wait for that to break before getting seriously short. Example – After the bearish-sentiment index bottomed in 1987, the market rallied another 14% before crashing.

Smart investors like Bill Fleckenstein have been highlighting the credit bubble since the mid-1990’s. And today markets are more irrational than ever. Government intervention is preventing market cycles from proceeding like never before.

Industries like housing, banking, and commercial real estate have become completely dependent on government support. Their future (and that of our currency) depend on whether our leaders will extend or end this support. It’s a ludicrous, manipulated market.

So far America’s leaders have repeatedly demonstrated that they have zero tolerance for economic pain. Their support for the financial markets seems unlimited, no matter the long-term cost. I don’t see that changing without something drastic hapenning – another huge round of bailouts, a shift in the political landscape, or something…
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Mr. Morgan

 

Mr. Morgan

Courtesy of 

The Federal Reserve had a precursor before it became the lender of last resort. It wasn’t an institution or a government department. It was a single, solitary man named J. Pierpont Morgan. Mr. Morgan, he was called in the newspapers, and you didn’t need to go any further – everyone knew to whom you were referring.

Stock market panics were common in the early 1900’s because of the agrarian nature of the economy. Each summer, the local banks that catered to farmers throughout the country began calling their money back from the banks in New York City and Chicago so they could raise enough capital to bring in the h...



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Zero Hedge

Anatomy Of The $2 Trillion COVID-19 Stimulus Bill

Courtesy of Visual Capitalist

The unprecedented response to the COVID-19 pandemic has prioritized keeping people apart to slow the spread of the virus. While measures such as business closures and travel restrictions are effective at fighting a pandemic, they also have a dramatic impact on the economy.

To help right the ship, the Coronavirus Aid, Relief, and Economic Security Act — also known as the CARES Act — was passed by U.S. lawmakers last week with little fanfare. The act became the largest economic stimulus bill in modern history, more than doubling the stimulus act passed in 2009 during the Financial Crisis. ...



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Biotech/COVID-19

The new coronavirus emerged from the global wildlife trade - and may be devastating enough to end it

 

The new coronavirus emerged from the global wildlife trade – and may be devastating enough to end it

Government officers seize civets in a wildlife market in Guangzhou, China to prevent the spread of the SARS disease, Jan. 5, 2004. Dustin Shum/South China Morning Post via Getty Images

Courtesy of George Wittemyer, Colorado State University

COVID-19 is one of countless emerging infectious diseases that are zoonotic, meaning they originate in animals. ...



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Members' Corner

Tinker, Tailor, Mobster, Trump

 

Tinker, Tailor, Mobster, Trump

What happens when a Confidential Informant becomes President?

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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Kimble Charting Solutions

Fear Indicators Creating Huge Bearish Reversal Patterns This Month?

Courtesy of Chris Kimble

Its been a rough month for Stocks and Crude Oil. Could these two indicators be suggesting that a panic in fear has run out of steam?

This 2-pack looks at the fear indicators in the Nasdaq (VXN) and Crude Oil (OVX).

Both were at the highest levels in years back in 2008. Both peaked in 2008, as they created monthly bearish reversal patterns.

Turing the page to March of 2020, the Nasdaq fear index could be double topping at t...



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Insider Scoop

Strategist Channels His Inner Elsa, Says Apple Investors Need To Let It Go

Courtesy of Benzinga

The "Frozen" character Elsa famously declared it's time to "let it go" when her dark secret has been discovered. Boris Schlossberg of BK Asset Management has a similar message to Apple Inc. (NASDAQ: AAPL) investors.

'Absolutely' No Discretionary Spending

The market is guilty of "utterly underestimating" the ultimate economic impact the ...



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Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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Promotions

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Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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