One of the oldest weekly sentiment indicators is the “Investors Intelligence Survey“ or IIS. The IIS questions stock-market newsletter writers once a week to see if they were bullish or bearish on the stock markets in the near-term.
Data for November 10, 2010:
- Bulls = 48.4%
- More about Investors Intelligence Bull Bear Survey
My charts below showing the “Investors Intelligence Survey“ or IIS and its moving averages currently say now is a good time for a market correction. On September 22, 2010 with the S&P500 (quote and charts) at 1,134 I wrote on the sentiment page of my newsletter:
"Sentiment made a lower low last month while the market made a higher low. This divergence is probably due to noise in the readings but the odds continue to favor saying the low for the S&P500 is in at 1010.91 given the quick recovery in sentiment and slowly improving economic data. It was good that many of my stocks fell into my buy zones during the latest pull-back. I added shares and now I have nice gains for the portfolio overall from those buys. The 4-week moving-average (MA) suggests the market can work significantly higher in the weeks ahead until that reading gets into my “profit taking” caution zone...."