Newsletter Writers Are Increasingly Bullish

This week's sentiment survey from Investors Intelligence showed that bullish sentiment among newsletter writers is near its highest levels since the March lows (50.6%), while bearish sentiment is at a five-year low (17.6%).  This puts the spread between bulls and bears at 33, which is the highest level since December 2007. 

High levels of bullish sentiment are typically considered contrarian, but we would note that sentiment can remain bullish for extended periods of time with little impact on the market.  During the bull market from 2003 - 2007, the spread between bulls and bears was frequently above 30, but equities remained strong.  While it is true that markets typically peak when bullish sentiment is high, however, high levels of bullish sentiment don't necessarily mean an imminent decline.

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Comments

[David]

Does anyone have any experience using Bloodhound Investment Research? It looks like an interesting investment tool, but I'd love to hear from others. The site is www.bloodhoundsystem.com

Thanks.

[John smith]

So a high level of bullishness may mean something or it may not. And if it does mean something we don't know what it means. It could mean that the stockmarket is about to go down or it could mean that it will continue to go up. We will only know what it means in the future when we look back. Then we will be able to say "Remember that time in November 2009 when bullishness was high? Well that was obviously a sign of the crash of Jan 2010. Gee I wish I'd paid attention.", or we might say "Remember that time in November 2009 when bullishness was high, just as the greatest bull market in history had begun? Gee I wish I'd listened to those people.".

[Senan]

Of course - not to be too cynical or anything - presumably newslatter writers have increased subscriptions when things are on an uptick!