Just How Bullish Is This Market?

I see many of the bearish market commentators proclaiming that market participants are now wildly bullish, or in the words of Kass: "there is a bull market in complacency".

Who is still bearish among strategists you might ask? Only all of those that ever were, including: Doug Kass, David Rosenberg, Mort Zuckerman, Joe Battapaglia, David Tice, Peter Schiff, Alan Abelson, et al. So, this bandied about notion that there has been a big move in sentiment from bear to bull is absolutely false.

All the major market sentiment surveys (AAII, Market Vane, Consensus, Inc., First Coverage) indicate that the market sentiment is overall "neutral" right now. It is no longer bearish, as it was in the first quarter of the year.

Neither is it as positive as it was in May, as many are looking for a correction or a resumption of the bear market and believe this is the time of the year that is most likely.

Citigroup publishes a proprietary chart that shows sentiment to be somewhat negative, if anything. Because the market climbs a "wall of worry", this is a positive for further gains in the stock market.

Disclosure: No positions

Comments

[Roger Knights:]

Here's an Aug. 7 SA article, "Sentiment Readings Disturbingly Bullish":

seekingalpha.com/artic...

Aug 09 05:14 AM

[Roger Knights:]

Here's another, "TIM report: Sentiment crosses into bullish territory":

seekingalpha.com/artic...

Aug 09 06:54 AM

[Brian McMorris:]

I guess it comes down to whose reports are better, yours or mine. The sentiment reports I cite are very well established and have stood the test of time. So, if you want to remain in the Bear camp, go ahead. I have made a lot of money since March on the backs of the Bears and am greatful that they remain that way.

Check out this site for Investor Sentiment:

online.barrons.com/pub...

Aug 09 02:07 PM

[Prudent Man...:]

Some of those "strategists" I personally know. I also know they are not aware of what their own kids are doing now without knowing what the future of the stock market will be. All are good, smart people and all are mere humans. All also rely upon easily available statistics and secondary information and not primary research analysis though some of them did, in the past, actual on the ground primary research-an unfortunately lost combination of art and science of the past and how Warren Buffett made the base of the fortune which has allowed him to get preferential investments today.

It always is and always s has been the assumption or aversion of risks, based upon my knowledge, information and experience, that is of import to me. If you are looking to "make" rather than "earn" a quick buck you will probably get what you deserve.

Based upon the honest track record of the "smart" money I have always been reluctant to follow them and their re-writing of their track records. Only my own profits and losses are relevant to me.

If you want to think with someone else's mind follow the "pros". Most of their wealth has been accumulated by fees, salaries subscriptions and bonuses, not profitable trading. If you want to make solid decisions, listen to their facts not their opinions.

Good luck but don't delude yourself that you are "creating" wealth for anyone but yourself. I certainly don't.

Aug 09 02:41 PM

[Mel Shapiro:]

Is the market bullish or is it reflective of coming inflation? Since inflation destroys the purchasing power of currency, one may wish to hold another "currency," one with high liquidity, one whose value can be quickly protected by rapid product pricing adjustments and preferrably one that pays "interest." i.e. dividends. Real estate does not meet these criteria, nor do bonds or precious metals.

Aug 09 04:40 PM

[Mad Hedge F...:]

too bullish for me. Welcome to the new bubble. In four months we have gone from 35% below the 200 day moving average to 15% above. It turns out that 1,000 in the S&P 500 is 38.2% recovery of the fall from the2007 peak, a great Fibonacci number. DeMark indicators are showing that buying power is getting exhausted. Daily sentiment indicators are 88%bullish. RSI’s and oscillators are over extended. Every day the buyers show up, marching in lockstep with military precision, to give us our needed spike up at the close to keep the rally alive on the charts one more day. Worst of all, I am getting deluged with emails from subscribers who, having stayed out all year, are asking if they should start buying now, and buying everything. All of this, and we still have the second half of the “W” to discount. If the American stock market was the only issue, I wouldn’t really care, since most of my longs are overseas. But if the US rolls over like the Bismarck, emerging markets,foreign currencies, commodities, the energies, and junk bonds will be dragged down with it, because everything is so interlinked these days.There will be no place to hide. I think the glass half full crowd is coming to the end of their run, so I would urge investors to pare down some risk. If your friends stay in, and they make a ton of money,that’s fine. Just let them buy the next round of drinks.

Aug 09 05:58 PM

[Brian McMorris:]

Prudent...you have it right. People should come to sources for data and opinion, like Seeking Alpha, or all our individual blogs, and glean what information they can and combine that with their own experience and risk tolerance and make their own decisions. That is exactly what I do. I never follow the advice of supposed "pro strategists" and instead love to spar in writing with those same pros. I find that my opinion is as valid and often informed as theirs. So why not follow my own radar.

I think this is the point you are making. More power to you and good luck with your investing.

Regarding Warren Buffet, who I hold in high esteem like most others: his true gift is in management, not so much investing. He is the kind of manager that everyone wants. He gives you the resources to do your job, jointly agrees to objectives and then gets out of the way. He is able to attract and retain very high caliber managers who have managed to turn even the worst businesses / sows ears, into gold making machines / silk purses.

It will be a challenge for him to find a way to morph his beloved newspaper empire into something that survives the internet.

Aug 11 12:05 AM

[PearlCreek:]

Roll Call

Doug Kass: Seems like a straight shooter who puts his money where his mouth is. Called the bottom. When he speaks, I will take note.

Battapaglia: One of the cheerleaders of the tech bubble. Listen to him and factor in the exact opposite of what he says as the more likely outcome.

Abelson: He has been bearish since his expulsion from the womb. It is how he is wired.

Tice: His livelihood depends on marketing to bears

Schiff: He is this generations Joe Granville

Aug 11 12:34 AM

[Brian McMorris:]

Pearl Creek...your analyst analysis is dead right on!

Aug 19 08:02 PM