About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, May 23, 2013

Stock Market Sentiment

I have been tracking advisory and related market sentiment for longer than I would
care to remember. This type of data is helpful in determining when attitudes are
either too bullish or too bearish, but is not so helpful when it comes to shorter run
trade timing decisions. Sentiment is too bullish now, and on balance, is the most
bullish since 2007. Even so, % bullish measures lag the very high readings of the
1990s. What I watch for from a timing perspective are occasions when the bulls
start leaving the party even as the market goes up. Not all advisors and investors
are dummies, so on the premise that the smart money leaves early, you watch for
overly bullish sentiment begin to fade ahead of the market. Sometimes the fading
process happens rapidly, but you can often find yourself with a little headstart. Right
now, sentiment is too bullish but it has been relatively stable since it moved to excess
in Feb. of this year. You can check in here weekly and keep your own data and charts.

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