Tuesday, December 28, 2010

Nuances in Sentiment

Those who remember the June 2003 to June 2007 period will recall that sentiment never got bearish, except for a very short period of time in mid 2006.  Yet the market kept going higher.  You cannot put down a bet based solely on playing contrarian towards sentiment.  It works well at extremes, but usually better during bearish extremes than bullish extremes. 

The sentiment numbers also don't reflect the give up that much of the public has over equities.  You don't have the same love for equities that you saw in 2000 or 2007.  And the sentiment numbers make it seem like the sentiment is just as bullish now as it was back then.  That is laughable. 

You've got to look beyond the numbers and read the newspaper, watch the TV news, and talk to your neighbors.  There is now a deeply ingrained apprehension towards long term stock investing.  If that apprehension slowly abates as the economy gets better and unemployment goes down (almost a given looking at the economic cycle), you will see higher prices despite the bullish sentiment. 


Anonymous said...

You need to stop talking that garbage and cover that shit fool. Market is going to make a run higher and unless you're just about losing more money, you need to cover and get ready to reshort higher.

Anonymous said...

Short ZLC @ 4.74


Petsamo said...

That first anonymous sounds like Mr. T.

Anonymous said...

I would not be short here. I would definitely would not open a new long here either at ES 1255. The risk/reward sucks. After a 20-30 point pullback, I would consider going long for a trade. Cash is a position.

Anonymous said...

My system triggered a short today looking for a 1% move lower from any price point high Wed-Fri.