The "Dumb Money" indicator is shown in figure 1. The "Dumb Money" indicator looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investor Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio. The "dumb money" remains extremely bullish.
Figure 1. "Dumb Money" Indicator/ weekly
The "Smart Money" indicator is shown in figure 2. The "smart money" indicator is a composite of the following data: 1) public to specialist short ratio; 2) specialist short to total short ratio; 3) SP100 option traders. The "smart money" is neutral.
Figure 2. "Smart Money" Indicator/ weekly
Company insiders continue to sell their shares to an extreme degree. See figure 3, a weekly chart of the S&P500 with the Insider Score "entire market" value in the lower panel.
Figure 3. Insider Buying v. Selling/ "Entire Market"/weekly
Our last look at investor sentiment comes from the Rydex bullish and leveraged (green) v. the Rydex bearish and leveraged (red) assets. See figure 4 a daily chart of the S&P500. After starting the week very bullish, these market timers threw in the tool as the market moved lower. Of course, if they had stayed only a few more days, Friday's lift would have bailed them out.
Figure 4. Rydex Bullish and Leveraged v. Rydex Bearish and Leveraged/ daily
3 comments:
PSX ready for correction http://screencast.com/t/WIl3zHOugD4
Good stuff Guy. I agree that there seems to be a solid bid beneath the market. The Dumb Money indicators don't seem to jive with the general market sentiment. Usually when the sentiment indicators are flashing an extreme it agrees with the general 'feel' of what I am reading and seeing, etc. But this time, I am not feeling the extreme bullishness that this is showing.
Regardless, still positive.
talk soon,
Tyler
DavidDT:
Thanks for your contributions.
Tyler: Just look at volume...shriveled up like a prune. Sentiment is bullish by several different measures but stocks are for renting not owning. Everyone assumes they can get to the exits, but we know how that ends.
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